Vietnam Industry September 2021

Vietnam

Vietnam: Industrial activity declines again in September

September 29, 2021

Industrial output fell 8.1% year-on-year in September, easing from August’s 9.5% decline. The figure marked the third consecutive month of falling output, and reflected restrictions placed on key regions to combat the recent outbreak of Covid-19 cases. September's milder fall was largely driven by a softer drop in manufacturing production.

Meanwhile, annual average industrial production growth fell to 4.9% in September (August: +6.0%), signaling a worsening trend in the industrial sector.

Looking ahead, industrial production is projected to grow at a strong rate in 2021, before accelerating in 2022 as the pandemic eases and associated restrictions are eased. Despite the ongoing Covid-19 pandemic, the underlying strength of Vietnam’s industrial sector remains intact: Vietnam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to the U.S.-China trade tensions. That said, general uncertainty regarding the pandemic poses a risk downside to the outlook.

FocusEconomics Consensus Forecast participants estimate that industrial output will grow 5.1% in 2021, which is down 1.8 percentage points from last month’s forecast. For 2022, panelists expect industrial production to expand 6.3%.


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Vietnam Industry September 2021 1

Note: Year-on-year variation of industrial production index in %.
Source: General Statistics Office of Vietnam (GSO) and FocusEconomics calculations.


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