Vietnam Industry February 2021

Vietnam

Vietnam: Industrial output shrinks for first time in 10 months in February

February 26, 2021

Industrial production fell 6.1% year-on-year in February (January: +24.4% yoy). February's print marked the first downturn since May 2020 and the sharpest in 10 months, and was largely driven by falling manufacturing, mining and electricity output.

As a result, the trend deteriorated significantly, with the annual average growth of industrial production coming in at 3.1%, down notably from January's 5.2% reading.

Nevertheless, industrial production should gain steam this year after 2020’s slowdown, as economic activity recovers in key international markets. Moreover, the underlying strength of Vietnam’s industrial sector remains intact despite Covid-19: 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. However, uncertainty regarding the evolution of the pandemic and a sluggish domestic rollout of vaccines cloud the outlook somewhat.

FocusEconomics Consensus Forecast participants estimate that industrial output will grow 8.3% in 2021, which is down 0.7 percentage points from last month’s forecast. For 2022, panelists expect industrial production to expand 7.3%.


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Vietnam Industry February 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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