Vietnam: Industrial output growth eases in May
May 29, 2021
Industrial output expanded 11.6% in year-on-year terms in May, which was a deterioration from April's 24.6% surge. The result was largely driven by weaker manufacturing output. In addition, mining and quarrying production contracted at a sharper rate.
Meanwhile, annual average industrial production growth rose to 7.9% in May (April: +6.4%), signaling an improving trend in the industrial sector.
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.
Author: Stephen Vogado, Economist