Vietnam Industry October 2021

Vietnam

Vietnam: Industrial activity falls at a slower rate in October

October 29, 2021

Industrial output fell 5.9% year-on-year in October, easing from September’s 8.1% decline. The figure marked the fourth consecutive month of falling output, and reflected restrictions placed on key regions to combat the recent outbreak of Covid-19 cases. October's milder fall was largely driven by a softer drop in manufacturing production.

Meanwhile, annual average industrial production growth fell to 3.9% in October (September: +4.9%), signaling a worsening trend in the industrial sector.

Looking ahead, industrial production is projected to accelerate in 2022 from this year’s estimate level, as the pandemic abates and associated restrictions are eased. Moreover, 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 7.4% in 2022, which is up 1.1 percentage points from last month’s forecast. For 2023, panelists expect industrial production to expand 9.4%.


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Vietnam Industry October 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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