Vietnam: Industrial production growth slows sharply in November
November 29, 2019
Industrial production rose 5.4% in November year-on-year, down from October’s revised 9.8% expansion (previously reported: +9.2% year-on-year). November’s deceleration was driven by slower growth in the manufacturing sector and a contraction in the mining and quarrying sector. That said, average industrial production growth for 2019 to date still compares extremely favorably to regional peers, many of whom have seen their industrial sectors buffeted by the U.S.-China trade dispute and softer global economic momentum.
Industrial production growth should be healthy next year, spearheaded by a burgeoning manufacturing sector. Vietnam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to the U.S.-China trade spat, thanks to a cheap workforce and business-friendly government. However, due to its open nature, the economy will remain vulnerable to a potential global economic slowdown, which would impact the industrial sector.
Author: Oliver Reynolds, Economist