Growth prospects for industrial production in Q2

15:34 | 24/04/2015 Industry

(VEN) - The strong growth of industrial production in the first quarter of this year, especially the stability of some industries in the processing and manufacturing sector opened hopes for a bright prospect of further growth of the industrial sector in the second quarter.

Growth prospects for  industrial production in Q2

Photo: Can Dung

Highlights in the processing industry

According to statistics from the Ministry of Industry and Trade (MOIT), Vietnam’s Index of Industrial Production (IIP) grew 9.1 percent in the first quarter of 2015. Most industrial sectors posted higher growth compared with the same period last year, of these the processing and manufacturing sector increased 9.6 percent.

The higher IIP for the processing and manufacturing sector showed that industrial production was becoming more stable and also presented higher demand from domestic consumers. The industrial products posting high IIP of more than 10 percent included milk and milk product processing 12.1 percent, food for cattle, poultry and aquatic products 19.7 percent, fiber production 21.8 percent, footwear 26.1 percent and products made from paper 32.4 percent.

However, there were other industrial products that saw decreased IIP due to seasonal factors, including sugar (3.4 percent), noodles (17.1 percent) and ready-made garments (9.7 percent).

MOIT also said the improvement of industrial production, especially the relatively high growth of the processing and manufacturing sector in the first quarter was a good condition for further growth of industrial production in later months.

Bright prospect

MOIT also forecast that industrial production will grow better in coming months as the domestic enterprises look to increase material imports for production. Major exports with stable orders and increasing demand like garments and textiles, footwear and electronic parts will contribute to industrial production growth. Stable export markets in particular will make a more positive impact on businesses in this sector.

The recent reasonable increases and drops of petrol prices in conformity with the world’s market prices and the forthcoming warmer weather are expected to boost the growth of some sectors like beer and soft drinks, construction materials and mining and processing.

In addition, domestic enterprises have also maintained their business activities, actively boosted trade promotion programs to persify export markets and prioritized developing the domestic market. These are favorable conditions expected to keep promoting Vietnam’s industrial production in the second quarter.

To help domestic enterprises stabilize production and sustain the growth rate of the industrial sector, MOIT will continue to adopt solutions to boost production, seek and expand markets, encourage consumption, and increase sales of inventories. The ministry will also focus on intensive industrial production to step by step develop national brands and products with high competitiveness in the global value chain; attract investment to develop support industries which meet input material demands, reduce imports and reinforce coordination among the enterprises during manufacturing and supplying process.

MOIT also recommended domestic enterprises to take the initiative in technological innovation for production, managerial capability improvement, market approach and expansion, and outlining feasible business strategies for their firms in general and each product in particular.         

By Viet Nga