Vietnam: Industrial production loses steam in February
February 28, 2018
The industrial sector grew at a solid annual pace in February, but it was markedly slower than January’s pace of expansion. Industrial output grew 8.0% over the same month of the previous year in February, a substantial drop from the revised 21.9% year-on-year expansion recorded in January (previously reported: +20.9% year-on-year). February’s print marks the lowest result since May 2017 and reflects an across-the-board deterioration and a diminished base effect from January.
Looking at the breakdown, the manufacturing sector continued growing at a robust pace, rising 10.7% year-on-year in February, but this was less than half of January’s revised stellar growth of 24.1% (previously reported: +23.8% yoy). There was also a substantial slowdown in the electricity and gas, and water supply, sewerage, waste management and remediation activities sectors. In annual terms, the electricity and gas sector expanded 3.0% in February, down from a revised 19.0% expansion in January (previously reported: +15.4% yoy) and the water supply, sewerage, waste management and remediation activities sector grew a meagre 1.0%, down from a revised 7.5% growth (previously reported: +6.8%). Moreover, the mining and quarrying sector reverted to contraction in February, with output in the sector dropping by 1.8%, contrasting a revised 13.2% expansion in January (previously reported: +10.5% yoy).
In month-on-month terms, industrial production fell 17.1% over the previous month in February. This marked a much sharper contraction than the 3.4% month-on-month decline in output observed in January. Annual average growth dropped to 11.1% in February, down from 11.7% in January.
Author: Nihad Ahmed, Economist