Manufacturing and processing up 10.8%

Industrial production in Q4 2025 continued to post robust growth, with the industrial production index (IIP) increasing 9.9% year-on-year, driven by enterprises stepping up output to prepare goods for year-end consumption and export demand.

According to the socio-economic report for December and the fourth quarter of 2025 released by the General Statistics Office under the Ministry of Finance on January 5, the industrial sector maintained strong momentum. For the whole of 2025, the industrial production index rose 9.2% compared to the previous year, marking the highest growth rate since 2019.

Notably, in Q4 2025, manufacturing and processing expanded by 10.8%, remaining the main growth engine of the industrial sector. Electricity production and distribution increased by 8.0%, while water supply and waste management activities grew by 5.3%. The mining sector also recorded positive growth of 3.4%.

In 2025, the industrial production index was estimated to rise 9.2% year-on-year, compared with an increase of 8.2% in 2024. Manufacturing and processing grew by 10.5%, contributing 8.4 percentage points to the overall increase. Electricity production and distribution rose 6.7%, contributing 0.6 percentage points, while water supply and waste treatment increased 7.8%, adding 0.1 percentage points. Mining edged up 0.5% after a sharp contraction in 2024, also contributing 0.1 percentage points to overall growth.

Several key level-II industries recorded strong growth in 2025. Motor vehicle manufacturing surged 22.0%, followed by other non-metallic mineral products at 16.2%, rubber and plastic products at 15.7%, metal production at 15.4%, garment manufacturing at 13.2%, and fabricated metal products excluding machinery and equipment at 12.5%. Chemical products increased by 12.4%, leather and related products by 11.1%, food processing by 11.0%, coke and refined petroleum products by 10.8%, paper and paper products by 10.4%, furniture manufacturing by 9.4%, and electronics, computers and optical products by 8.3%.

By contrast, the IIP of several sectors recorded modest growth or declines. Hard coal and lignite mining rose only 2.5%, while crude oil and natural gas extraction fell 2.5%. Industrial production in 2025 increased across all 34 localities nationwide, with several provinces posting relatively high growth rates thanks to strong performances in manufacturing and electricity generation.

A key highlight was the sharp rise in output of several major industrial products compared to the previous year. Automobile production surged 39.1%, rolled steel increased 17.6%, televisions rose 17.4%, aquaculture feed and everyday apparel both climbed 13.8%, cement grew 13.6%, leather footwear rose 13.3%, processed seafood increased 11.1%, and NPK compound fertilizers grew 10.7%.

The consumption index of the manufacturing and processing sector in December 2025 declined 0.4% from the previous month but rose sharply by 12.2% year-on-year. Overall in 2025, the sector’s consumption index increased 9.9% compared to 2024, lower than the 11.4% growth recorded a year earlier.

2026 set to see further industrial expansion

Earlier, the Purchasing Managers’ Index (PMI) report for Vietnam’s manufacturing sector released by S&P Global for the final month of 2025 pointed to continued improvements in output, new orders and employment.

S&P Global reported that Vietnam’s manufacturing sector closed 2025 with positive growth signals as the PMI reached 53.0 points in December. Although this figure declined slightly from 53.8 points in November, remaining above the 50-point threshold indicated a strong improvement in overall business conditions.

New orders increased for the fourth consecutive month, supported by improving customer demand. However, the pace of growth slowed compared to November, partly because new export orders declined again for the first time after three months of expansion, placing pressure on overall demand.

Looking ahead to 2026, S&P Global noted that manufacturers are showing growing optimism about output prospects. Business confidence strengthened for the third consecutive month and reached its highest level since March 2024.

Survey results showed that nearly half of respondents expect output to increase in the year ahead, driven by improved customer demand, the launch of new product lines and efforts to enhance production capacity.

Commenting on the overall picture, Andrew Harker, economics director at S&P Global Market Intelligence, said Vietnam’s manufacturing sector ended a volatile year on a positive note, with output and new orders maintaining strong growth while business confidence reached a 21-month high.

Overall, the manufacturing sector is set to enter 2026 from a position of strength, with producers optimistic about attracting new orders and expanding capacity. S&P Global Market Intelligence forecasts Vietnam’s industrial output to grow by 6.7% in 2026.

According to the Ministry of Industry and Trade, industrial production in 2025 recovered rapidly, expanded broadly and continued to grow despite persistent global economic challenges, reinforcing its role as a key driver of overall economic growth. The ministry estimated the industrial production index to rise by around 9.5% in 2025, the highest level since the COVID-19 pandemic. Industrial growth rates during the 2019 - 2025 period were recorded at 9.1%, 3.3%, 4.7%, 7.4%, 1.3%, 8.2% and an estimated 9.5%, respectively.