Processing, manufacturing industries drive economic growth

In the first half of this year, these sectors grew by 0.37 percent, but in August the growth rate increased to 3.5 percent. These sectors are top foreign direct investment (FDI) attractors, with nearly US$13 billion in the first eight months, a year-on-year increase of almost 15 percent.

In the first eight months, the production of key industrial products grew at high rates, for example sugar 34.9 percent; NPK (nitrogen, phosphorus, and potassium) fertilizer 14.2 percent; petroleum 10.1 percent; television 10 percent; chemical paints 9.5 percent; synthetic fabrics 8.6 percent; and laminated steel 6.5 percent.

Positive signs have been seen from major export sectors such as textiles, chemicals, metals, prefabricated metals, and furniture.

The processing and manufacturing industries recovered strongly in August - photo: Du Ca

According to Pham Thi Ngoc Thuy from the Government’s Advisory Council for Administrative Procedure Reform, construction material businesses have resumed imports, while the stock level of textile, garment, leather and footwear companies has decreased sharply.

The eight-month index of industrial production grew in 49 localities and declined in 14 localities. In some localities, the processing and manufacturing industries grew at high rates, for example Bac Giang 16.4 percent; Phu Tho 15.7 percent; Nam Dinh 13.8 percent; Kien Giang 13 percent; Hai Phong 12.1 percent; and Phu Yen 11.8 percent. Localities achieving high growth rates in terms of electricity generation and distribution include Hau Giang (183.8 percent); Thai Binh (91 percent), and Tra Vinh (34.7 percent).

According to the General Statistics Office of Vietnam, the processing and manufacturing industries contribute more than 25 percent to Vietnam’s gross domestic product (GDP) and over 95 percent of the country’s total export value. With strong recovery in the first eight months, these sectors have resumed their role as a driving force of the entire economy’s growth.

To further promote the recovery of the processing and manufacturing industries during the final months of the year, support policies are needed to resolve difficulties facing industrial production enterprises. The biggest problem is reducing waste products and increasing finished products. Resolving this problem will help reduce the cost of recycling and reproduction as well as the rate of waste during production, enhancing production efficiency.

The Ministry of Industry and Trade (MoIT) proposed that localities urgently apply suitable policies to provide financial support for industrial enterprises, especially those operating in the processing and manufacturing sectors. Industrial and supporting industry development programs should be effectively implemented, focusing on enhancing capacity for small- and medium-sized enterprises. For their part, businesses should promote restructuring to reduce production costs and enhance product competitiveness. “The MoIT will keep a close watch on changes in the world market, especially the situation of major export markets, and propose to the Government and State agencies timely measures to resolve difficulties for businesses,” said a representative of the MoIT’s Agency of Industry.

During the final months of the year, the Government, State authorities and sectors will prioritize helping businesses overcome difficulties in production and trade and accelerate investment capital disbursement. Greater support will be provided to facilitate business access to capital resources.