Vietnam: Industrial activity growth slows slightly in January
Industrial output grew 2.8% year-on-year in January, easing from December’s 3.1% increase but still marking the third month of growth in activity. Looking at the details, the milder growth came on the back of a contraction in mining output, while stronger growth in the all-important manufacturing sector bolstered the overall reading.
Meanwhile, annual average industrial production growth fell to 1.3% in January (December: +3.1%), signaling a slight worsening trend in the industrial sector.
Looking ahead, industrial production is projected to accelerate in 2022 from this year’s estimated 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 downside risk to the outlook.