Positive growth in industrial production in the first half of 2024. (Photo: Duc Duy/Vietnam+)
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In the first six months of 2024, the consumption index of the processing and manufacturing industry increased by 10.8% compared to the same period in 2023 (down 2.2% in the same period last year), while the decrease in inventory index are positive signals indicating the recovery of industrial production.
Improved “health” of the manufacturing sector
Following the recovery momentum from the end of 2023 and the beginning of 2024, industrial production continued to show positive signs and made positive contributions to the overall economic growth.
The estimated added value of the whole industry in the first six months of 2024 increased by 7.54% over the same period last year (up 6.47% in the first quarter and 8.55% in the second quarter), of which, the processing and manufacturing industry increased by 8.67% (up 7.21% in the first quarter and 10.04% in the second quarter), contributing 2.14 percentage points to the total added value of the whole economy.
At the same time, the electricity production and distribution sector increased by 13.26%, contributing 0.5 percentage points; the water supply and waste treatment sector increased by 7.13%, contributing 0.04 percentage points; only the mining industry decreased by 7.22%, reducing 0.24 percentage points in the overall increase.
Notably, Vietnam’s manufacturing purchasing managers’ index (PMI) rose sharply to 54.7 in June, compared to 50.3 in May, indicating an improvement in the “health” of the manufacturing sector for the third consecutive month and a significant strengthening of business conditions. Growth in the manufacturing sector picked up strongly in the second quarter.
Therefore, although the industrial production index (IIP) in June 2024 is estimated to have increased slightly compared to the previous month (up 0.7%), it increased by 10.9% over the same period last year, of which, the processing and manufacturing industry is estimated to have increased by 12.6%; electricity production and distribution increased by 13.7%; water supply, waste management and treatment activities increased by 8%; only the mining industry decreased by 7.7%.
 Businesses boost production. (Photo: Duc Duy/Vietnam+)
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In the first six months of 2024, the overall industrial production index increased by 7.7% over the same period last year, of which, the processing and manufacturing industry increased by 8.5%; electricity production and distribution increased by 13%; water supply, waste management and treatment activities increased by 6.3%; only the mining industry decreased by 5.5%.
Garment and textiles is one of the most promising sectors as the market starts to recover. Mr. Cao Huu Hieu, Director of the Vietnam Textile and Apparel Group (Vinatex), said that up to now, most of the garment enterprises in Vinatex have signed orders until the end of the third quarter of 2024 and continue to negotiate for the fourth quarter of 2024 – the peak season for production of orders for Christmas and New Year.
Focusing on supporting businesses
According to the Ministry of Industry and Trade, industrial production grew on a large scale, with 56 out of 63 localities having an increase in the industrial production index compared to the same period last year, only 7 localities had a decrease in IIP, of which 25 localities had high growth rates in double digits, such as: Khanh Hoa up 46.4%; Bac Giang up 26.5%; Hai Phong up 15.2%; Quang Ninh up 13.3%…
Notably, some key industrial products in the first six months of 2024 increased sharply compared to the same period last year: steel bars and angles increased by 34.5%; fabric woven from natural fibers increased by 18.4%; rolled steel increased by 17.3%; electricity production increased by 12.2%.
Mr. Pham Cong Thao, Deputy General Director of Vietnam Steel Corporation, said that in the last six months of the year, the steel market is likely to continue its recovery momentum thanks to a number of positive factors such as: Vietnam’s economy is growing well, growth indicators are improving every quarter, investment capital disbursement is being promoted, besides the government is also very interested in removing difficulties for the real estate and construction sectors, creating a premise to stimulate domestic steel consumption demand.
In addition, policies and some new laws are expected to be applied soon by the National Assembly, such as: Real Estate Business Law, Land Law (amended), Housing Law (amended) if applied early will be one of the factors contributing to the improvement of demand for the real estate sector in the second half of the year. With the above factors, it is forecasted that the market in the second half of the year will recover better than in the first half for the steel industry.
The steel industry is expected to continue to grow thanks to the recovery of the economy, especially the real estate sector. (Photo: Duc Duy/Vietnam+)
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Also according to the report of the Ministry of Industry and Trade, the consumption index of the processing and manufacturing industry in the first six months of 2024 increased by 10.8% compared to the same period in 2023 (down 2.2% in the same period last year).
The inventory index of the processing and manufacturing industry is estimated to increase by 7.6% at the end of June 30, 2024 compared to the same period last month and by 9.6% over the same period last year (up 19.9% in the same period last year). The average inventory rate of the processing and manufacturing industry in the first six months of 2024 was 76.9% (73.1% in the first six months of 2023).
Thus, in the first six months of 2024, the consumption index of the whole processing and manufacturing industry was much higher than in the same period last year, while the inventory index decreased, indicating a positive recovery of industrial production. At the same time, the number of employees working in industrial enterprises as of June 1, 2024 increased by 1.1% compared to the same period last month and by 3.8% over the same period last year, indicating an increase in new orders, production volume and labor demand in enterprises.
To create momentum for the following months, the Ministry of Industry and Trade will focus on removing difficulties and obstacles, reviewing and perfecting mechanisms to develop industrial production and energy; promoting the disbursement of investment capital, reviewing bottlenecks to soon put key projects and works into operation; focusing on solutions to ensure electricity supply in all situations to serve production…
Duc Duy
