Growth momentum from industrial production

Continuing the upward trend from the end of 2023, industrial production in the third quarter of 2024 showed more positive growth than the previous quarter, with an estimated value increase of 9.59% compared to the same period in 2023, which is nearly the highest level in the period since 2012 (second only to the 9.93% increase in the third quarter of 2017).

Motorcycle production and assembly line at Piaggio Vietnam Co., Ltd. (Binh Xuyen Industrial Park, Vinh Phuc province). (Photo: Tran Hai)

Overall, in the first nine months, the added value of the entire industrial sector is estimated to have increased by 8.34% compared to the same period in 2023, contributing 2.71 percentage points to the overall growth rate of the economy's added value, effectively playing its role as a driving force for growth.

According to experts, the positive results of industrial production partly stem from the booming export market, with manufacturers receiving more new orders for the remaining months of the year. The manufacturing industry has recovered strongly thanks to increased international demand after the improvement of global supply chains, helping the industry regain its important role as a driver of economic growth in the first nine months of 2024.

Broad-based growth

After Typhoon No. 3 (Typhoon Yagi ) Following the landfall, many industries such as mining and electricity production and distribution suffered heavy losses. However, the production activities of manufacturing and processing enterprises were not significantly affected thanks to the decisive leadership of local authorities in ensuring the rapid resolution of power outages and the early restoration of electricity supply to businesses. In addition, businesses proactively implemented storm prevention and mitigation plans, reorganized production, and increased shifts to compensate for damaged finished products, overcome production downtime, and ensure timely delivery according to signed contracts.

Many other positive factors also contribute to the industry's growth. processing and manufacturing industry For example, garment and footwear businesses have taken full advantage of foreign markets; electrical and electronics businesses have increased production volume due to numerous export orders;… All these factors have helped the processing and manufacturing industry continue its strong growth, clearly demonstrating its role as the main driver of growth in the third quarter, offsetting the decline in the agriculture, forestry, and fisheries sectors.

According to the Ministry of Industry and Trade, the consumption index of the entire manufacturing industry increased by 12.5% in the first nine months compared to the same period in 2023 (compared to a 0.6% increase in the same period of 2023). Meanwhile, the inventory index of the entire manufacturing industry, estimated as of September 30th, increased by 5.2% compared to the same period the previous month and only increased by 8.5% compared to the same period last year (compared to a 19.4% increase in the same period last year).

Simultaneously, the average inventory ratio for the entire manufacturing industry in the first nine months of 2024 was 76.8% (compared to an average of 85.3% in the first nine months of 2023), demonstrating a positive recovery in production and consumption. Industrial production also increased across the board, with the industrial production index (IIP) rising in 60 out of 63 localities in the first nine months. Some localities saw significant double-digit increases in IIP thanks to the manufacturing industry or the electricity production and distribution sector (IIP in Lai Chau increased by 43.3%; Tra Vinh by 41.9%; Phu Tho by 38.7%; Khanh Hoa by 36.4%; Bac Giang by 27.7%; Son La by 27.3%; Thanh Hoa by 20.4%;...).

Removing obstacles, stabilizing and developing production.

Entering the fourth quarter of 2024, the General Statistics Office (GSO) assessed that the Vietnamese economy continues to face many difficulties and challenges, being heavily impacted by risks and instability in the world related to economics, politics, natural disasters, and epidemics. According to Ms. Phi Huong Nga, Head of the Industrial and Construction Statistics Department (GSO), in order for the processing and manufacturing industry to continue playing its important role and being a driving force for economic growth, all levels and sectors need to implement synchronized solutions to support industrial production, overcome difficulties, stabilize and develop production.

Accordingly, due to the continued high prices of crude oil and natural gas worldwide, rising logistics costs, and increased impact on input materials, businesses urgently need support to overcome difficulties. The government and all levels and sectors need to accelerate the disbursement of support packages for businesses in a timely and effective manner, creating favorable conditions for businesses to access preferential loans quickly; simplifying administrative procedures, and expediting public investment disbursement to promote production, create jobs, and increase workers' income.

Relevant agencies need to strengthen efforts to prevent smuggled goods, combat transfer pricing and labeling fraud; and at the same time, promote and strengthen domestic consumption policies, stimulating domestic consumption of "Vietnamese people consuming Vietnamese goods".

The Ministry of Industry and Trade stated that it will continue to focus on removing difficulties and obstacles and supporting businesses in restoring production and business activities, especially those affected by Typhoon No. 3; and bringing large-scale, important industrial projects into operation to increase production capacity. The Ministry will actively advise on summarizing mechanisms and policies on international economic integration, especially the implementation of policies to attract FDI in the industrial sector.

Therefore, appropriate solutions are proposed to encourage and bind FDI enterprises to genuinely share and support domestic enterprises in order to promote technology transfer, develop management skills, form supply chains for materials and raw materials, and industry clusters, thereby enhancing the competitiveness of Vietnamese enterprises to gradually participate in global production and supply chains.

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