Industrial production maintains growth momentum

06:00 | 26/03/2022 Industry

(VEN) - In the first two months of 2022, the index of industrial production (IIP) grew considerably compared with the same period last year as a result of the industry and trade sector’s efforts to help manufacturers overcome difficulties and maintain production. 

industrial production maintains growth momentum
Labor sufficiency is crucial for stable industrial production

Production thrives

According to the Ministry of Industry and Trade (MoIT), due to the week-long Lunar New Year (Tet) holiday in early February, the month’s IIP decreased 12.4 percent compared with January, but grew 8.5 percent year-on-year. In the first two months, the IIP grew 5.4 percent compared with the same period last year. Specifically, the processing and manufacturing sector grew 6.1 percent, contributing 5.2 percentage points to the growth of the entire industrial sector; electricity generation and distribution up 6.5 percent, contributing 0.6 percentage points; water supply, waste and wastewater treatment up 2.5 percent, contributing 0.04 percentage points. The mining industry declined 2.8 percent, pushing the IIP down by 0.44 percentage point.

Key industrial products with high IIP growth in the first two months include alumina (up 20.3 percent); monosodium glutamate (up 17.6 percent); processed seafood (up 15 percent); clothing (up 14.1 percent); automobiles (up 12.2 percent); fabrics made from natural fibers (up 11.8 percent); fresh milk (up 11.5 percent); cement (up 11 percent); telephone and motorbike components (up 10.7 percent); and animal feed (up 10.4 percent).

Products with decreased IIP include televisions (down 32.4 percent); natural gas (down 13.4 percent); petroleum (down 12.8 percent); mobile phones (down 12.6 percent); synthetic fabrics (down 6.6 percent); and aquatic animal feed (4.4 percent).

Labor sufficiency is crucial for maintaining stable industrial production. In late 2021 when Covid-19 control measures proved effective, businesses sought all possible ways to get their employees back to work. In early February 2022, the number of workers at industrial production facilities increased 1.2 percent compared with early January and 1.3 percent year-on-year. The processing and manufacturing sector topped the list of workforce sizes.

industrial production maintains growth momentum
Industrial production keeps growing

Maximizing favorable conditions

In the context of unfavorable changes in the world market, especially increased petroleum prices, the MoIT is coordinating with other ministries and sectors to stabilize prices and control inflation in order to ensure continued production.

Member units of the ministry continue to keep a close watch on changes in the global and domestic markets in order to provide consultancy for state authorities to take suitable action. The MoIT will also coordinate with other ministries and sectors to provide guidance for businesses on taking advantage of foreign trade agreements to promote exports and domestic production.

The MoIT’s Vietnam Trade Promotion Agency (Vietrade) recently surveyed the linkage between domestic companies and multinational groups in the manufacturing industry. Vietrade Director Le Hoang Tai said the manufacturing industry is the backbone of the economy, and it must be supported in efforts to participate more deeply in manufacturing supply chains. Developing the manufacturing industry will contribute to the gradual formation of domestic supply chains. Survey results will provide data for the MoIT to carry out support activities to connect domestic manufacturing companies with multinational groups in Vietnam.

Truong Thi Chi Binh, Vice President and Secretary General of the Vietnam Association for Supporting Industries, emphasized the necessity of enhancing the capacity of small and medium enterprises to meet the requirements of global supply chains. In her opinion, tax, labor, research and development (R&D) incentives should be offered to encourage multinational firms and foreign invested companies to promote localization.

From a macro point of view, to promote industrial production, the MoIT has asked other ministries and sectors to provide businesses with effective support, accelerate public investment, maintain monetary stability and stable interest rates, and ensure sufficient labor for production.

Viet Nga