Vietnam Industry July 2021

Vietnam

Vietnam: Industrial activity drops at sharpest pace since February in July

July 29, 2021

Industrial output decreased 0.6% in year-on-year terms in July, which contrasted June's 2.6% increase. July's result marked the worst reading since February. The figure was primarily driven by weaker manufacturing output, while mining and quarrying output contracted at a steeper rate.

Meanwhile, the trend pointed down, with the annual average growth of industrial production coming in at plus 7.2%, down from June's 7.6%.

After last year’s slowdown, industrial production is projected to gain momentum on the back of returning demand from key international partners. 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, a relatively slow vaccine rollout, coupled with general uncertainty regarding the pandemic, pose a risk to the outlook.

FocusEconomics Consensus Forecast participants estimate that industrial output will grow 7.7% in 2021, which is down 1.8 percentage points from last month’s forecast. For 2022, panelists expect industrial production to expand 8.5%.


Author:, Economist

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Vietnam Industry July 2021

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


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