Vietnam's industrial production grows 8.4% in 2024, highest in 5 years

Vietnam’s index of industrial production (IIP) grew 8.4% year-on-year in 2024, extending the recovery after a similar growth of 8.4% in the first 11 months.

On monthly basis, the IIP in December 2024 grew 0.8% from November and 8.8% from December 2023, according to the General Statistics Office (GSO).

The whole-2024 figure outpaced the tallies recorded since the turn of the decade with 3.3% in 2020, 4.7% in 2021, 7.4% in 2022, and 1.3% in 2023.

The GSO elaborated that the IIP was driven by the manufacturing-processing sector going up 9.6%, electricity production and distribution up 9.5%, and water supply and waste-wastewater treatment up 10.7%.

Only the mining sector fell in the period, down 6.5%, pushing down the overall index by one percentage point.

Some sub-sectors with strong growth were plastics and plastic products with 24.9%; leather and leather products with 13.7%; electrical products with 11.9%; electronics, computers, and optical products with 8.3%; food processing with 7.4%.

Only three sectors recorded negative growth, namely coal mining with negative 5.5%, crude oil and natural gas exploitation with negative 10.9%, and repair and maintenance of machinery with negative 5.1%.

Only three localities recorded worse year-on-year performances in 2024, namely the central province of Quang Ngai with negative 1.8% growth, the central province of Ha Tinh with negative 1%, and the Central Highlands province of Gia Lai with negative 3.2%.

FDI businesses perform better in Q4/2024 from Q3

According to the GSO’s business performance survey, 77.3% of firms said their operations were better or stable from Q3/2024 to Q4/2024, while 22.7% said the operations were worse.

GSO survey featured 30,576 businesses, including 6,327 manufacturing-processing companies, 6,393 construction ones, and 17,856 commerce-service firms.

In terms of ownership, FDI firms were the most “optimistic” with 30.7% reporting better operations, 47.8% with stable operations, and 22.7% with worse operations.

For the state-owned sector, the figures were 28.3%, 49.5%, and 22.2%, respectively. For the domestic private sector, the respective tallies were 28.3%, 48.7%, and 23%.

The final month of 2024 saw a loss of momentum in the Vietnamese manufacturing sector, as growth of production and new orders slowed, while firms scaled back employment and inventories, according to S&P Global.

The market intelligence provider's Manufacturing Purchasing Managers' Index (PMI) for Vietnam dipped below the 50.0 no-change mark for the first time in three months during December, posting 49.8 from 50.8 in November.

The reading signalled a fractional deterioration in overall business conditions at the end of the year. "Business confidence dropped to a 19-month low," S&P Global wrote in a report released on January 2.