Vietnam’s processing and manufacturing industry increased by 72.6 percent in January compared to the 2019 baseline, according to Vietnam’s Industrial Production Index. However, this was lower than December 2024, when output stood at 92.8 percent above 2019 levels. It’s also worth noting the last week of January saw most businesses closed for the Lunar New Year break.

Month-on-month, production fell by 10.0 percent in January compared to December. Despite this, the sector recorded a 1.6 percent year-on-year increase from January 2024, indicating stable industrial activity.

Vietnam’s processing and manufacturing industry is a key driver of the country’s economic growth, contributing significantly to exports, employment, and industrial development. The sector includes a wide range of industries, such as electronics, textiles, food processing, automotive, and metal production, making Vietnam an important hub for global supply chains.

The industry has grown rapidly due to strong foreign direct investment, particularly from multinational companies looking to establish production bases in Vietnam. Electronics manufacturing, led by companies like Samsung, LG, and Foxconn, is one of the largest contributors, with Vietnam serving as a major exporter of smartphones, computers, and electronic components. Other key industries include textile and garment production, footwear manufacturing, and food processing, all of which benefit from Vietnam’s competitive labour costs and trade agreements.

Local manufacturing companies are also expanding, focusing on increasing production capacity and improving technology to compete in both domestic and international markets. The government has introduced policies to support industrialization, including tax incentives, investment in infrastructure, and free trade agreements that give manufacturers better access to global markets.

Despite its success, the sector faces challenges such as rising labour costs, environmental concerns, and the need for more skilled workers. Additionally, the increasing demand for automation and advanced manufacturing technologies requires further investment in research and development.

That said, Vietnam’s processing and manufacturing industry remains a key pillar of the economy, attracting foreign investment and driving export growth. With continued improvements in technology, workforce skills, and infrastructure, the sector is expected to maintain its strong momentum in the coming years.