Manufacturing boosted by FDI, export recovery and public investment

The National Statistics Office in Hanoi on July 3 releases economic statistics for the first six months. Photo: Nguyen Thu

Data released by the National Statistics Office (NSO) under the Ministry of Finance on July 3 showed that the industrial and construction sector maintained solid momentum during the first six months of the year, while the services sector continued to benefit from recovering domestic consumption, tourism, and trade.

Industrial value-added expanded by 9.86 per cent on-year during the period, contributing 40.35 per cent to Vietnam's overall economic growth.

Manufacturing remained the largest growth driver, posting growth of 10.23 per cent and accounting for 33.07 per cent of GDP growth. Electricity production and distribution rose 9.34 per cent, contributing 5.14 per cent, while mining expanded 6.67 per cent, contributing 1.60 per cent. Water supply, waste management, and wastewater treatment increased 7.72 per cent, contributing 0.54 per cent. Meanwhile, the construction sector grew 9.51 per cent, contributing 6.85 per cent.

Phi Thu Nga, director of the Industry and Construction Statistics Department under the NSO, said industrial production delivered encouraging results during the first half of the year, with manufacturing continuing to underpin economic expansion.

"Industrial production recorded positive growth in the first six months of the year, particularly manufacturing, which has continued to affirm its role as one of the economy's key growth drivers," Nga said.

According to Nga, the sector's performance has been supported by three major factors.

The first is the continued expansion of foreign direct investment (FDI) into manufacturing. She said an increasing number of foreign-led projects licensed in recent years have now entered production, adding new manufacturing capacity and creating additional growth momentum for the second half of the year.

The figures support this trend. Realised FDI reached an estimated $13.03 billion in the first six months of 2026, up 11.2 per cent on-year and the highest level recorded for the first half of any year over the past five years.

Manufacturing attracted the largest share of realised FDI at $10.76 billion, accounting for 82.6 per cent of the total. Real estate business activities followed with $965.2 million, representing 7.4 per cent, while electricity, gas, steam, and air conditioning supply attracted $479.2 million, equivalent to 3.7 per cent.

The second growth driver has been the recovery of export orders since the second quarter.

Nga noted that electronics and computer manufacturers in Vietnam have expanded production as they enter new production cycles and launch new product lines. At the same time, garments and textiles producers, together with footwear manufacturers, have maintained stable production despite continued uncertainties in global markets.

Public investment has become the third major growth catalyst.

Accelerating disbursement of major infrastructure projects has supported construction activity directly but also generated spillover effects across industries producing construction materials, machinery, equipment, and supporting industrial products.

Business sentiment also points to improvement. According to the NSO's quarterly business tendency survey, 36.3 per cent of manufacturing enterprises reported better business conditions in the second quarter compared to the previous. Looking ahead, 39.4 per cent expect business performance to improve in the third quarter.

Beyond industry, services continued to provide an important pillar of economic growth, driven by stronger domestic demand.

Retail sales of goods and consumer services maintained healthy growth during the first half of the year, while tourism continued to recover as both international and domestic visitor numbers increased. Transport, accommodation, food services, and other consumer-related activities also posted positive growth, supporting the broader services sector.

Despite the positive outlook, Nga cautioned that manufacturers will continue to face challenges during the second half of the year.

She noted that businesses remain under pressure from narrowing profit margins as production costs rise, while the international trade environment continues to present uncertainties.

"To sustain industrial growth, it is important to maintain lending rates at appropriate levels while ensuring stable supplies of production materials, so businesses can confidently expand operations," Nga said.

The NSO believes that with manufacturing maintaining its momentum, export orders continuing to recover, foreign-invested projects expanding production, and public investment generating stronger spillover effects, industry and services will remain Vietnam's two principal growth drivers throughout the remainder of 2026.