The Great Import Surge: Manufacturing Accelerates

Robust Production Recovery

According to the latest figures from the Ministry of Industry and Trade, during the first eight months of 2024, preliminary import turnover reached US$246.02 billion, up 17.7% over the same period last year. The domestic economic sector achieved US$89.58 billion, up 19.7%, while the foreign-invested sector reached US$156.44 billion, up 16.5%.

According to statistics from the Import and Export Department (Ministry of Industry and Trade), in the first eight months of 2024, 38 import commodities had a value of over US$1 billion, accounting for 90.8% of the total import turnover.

A notable aspect of the import map is the group of goods that need to be imported, including machinery, equipment, tools, and spare parts and raw materials serving domestic production… accounting for nearly 89% of the total import turnover, reaching US$218.9 billion, up 18.7% over the same period in 2023.

In particular, the import turnover of computers, electronic products, and components is estimated at US$69.9 billion, up 26.9% over the same period in 2023 and accounting for 28% of the country’s total import turnover; imports of machinery, equipment, and tools reached US$31.2 billion, up 16.7%. In addition, import turnover of most other commodities also recorded high double-digit growth, such as: all kinds of phones and components up 23.7%; all kinds of steel up 21.5%; electrical wires and cables up 30.7%; plastic raw materials up 17%; textile, footwear, and leather accessories up 16.2%; and all kinds of fabric up 13%…

According to the Ministry of Industry and Trade, the strong recovery of production and exports has led to an increase in the demand for imports of machinery, equipment, and raw materials serving domestic production, so Vietnam’s imports in the first eight months of 2024 from almost all major markets have increased. Typically: China continues to be Vietnam’s largest import market with a preliminary turnover of US$99.29 billion, up 33.9% over the same period last year and accounting for 37.5% of the country’s total import turnover; followed by imports from the Korean market reaching US$36.9 billion, up 10.3%; the ASEAN region reached US$30.27 billion, up 12.5%; Japan reached US$14.37 billion, up 3.1%; the EU reached US$10.8 billion, up 11.4%; and the US reached US$9.78 billion, up 6.9%.

Production and exports continue to play a leading role in Vietnam’s economic growth in the last quarter of 2024.

Economic experts assess that the surge in imports of equipment and “inputs” for production is a positive signal for the economy. This shows that the market demand has become “warmer”; domestic production and consumption have increased, and many new export orders have been signed.

Businesses Flexibly “Turn Waves, Pedal Wind” to Survive and Develop

Assessing the business development prospects in the fourth quarter, Dr. Mac Quoc Anh, Director of the Institute of Economics and Business Development, said that production and exports continue to play a leading role in Vietnam’s economic growth in the last quarter of 2024.

“Although the global economy is still uncertain, Vietnamese businesses are seizing many opportunities from public investment and the shift in the global supply chain. The shift of technology enterprises out of China is opening up opportunities for Vietnam to go deeper into high-tech and skilled labor fields. Indeed, there is always an opportunity in challenges and difficulties, and businesses have learned to find ‘mechanisms’ in ‘risks,’ emphasized Anh in an interview with VTV Times reporter.

The macroeconomic report of Dragon Capital Securities Company (VDSC) recently published also shows that Vietnam’s economic context in September 2024 continues to depend heavily on the manufacturing and export sector. The growth rate of the manufacturing industry is at 9.5% compared to the same period in 2023. This is a positive figure when set in the context of the global economy being heavily affected by recessions and political instability in many regions. Notably, the rise of some key industries such as textiles, footwear, electronics, metal production, assembly, and vehicle manufacturing… has seen a significant recovery, making an important contribution to the country’s total industrial production.

However, businesses also face many difficulties. For example, deposit interest rates at banks tend to increase, putting pressure on businesses’ borrowing costs, especially as enterprises are seeking capital to restore and expand production and business or simply prepare for export orders in the last months of the year.

“Many textile and garment enterprises are still ‘headache’ with financial calculations. In the recovery phase, enterprises need a lot of capital to invest in production, machinery, and import of raw materials… While trying to minimize costs, the burden of bank interest rates makes it difficult for enterprises to maneuver,” said Truong Van Cam, Vice Chairman and General Secretary of Vietnam Textile and Apparel Association.

In addition, there are challenges and barriers due to slow disbursement of capital, weak domestic consumption, and violent fluctuations in the international market… Especially, many northern enterprises were heavily affected by Storm No. 3 with huge losses.

Therefore, according to economic experts, this is still the time when enterprises, while taking advantage of current opportunities, still need practical support from the Government and local authorities.

“Vietnam needs to continue to focus on removing difficulties and obstacles in accessing credit capital for enterprises. At the same time, there should be policies to prioritize and create the most favorable conditions for enterprises affected by storms and floods to help them recover and stabilize production and business,” Dr. Mac Quoc Anh recommended.