Strong recovery evident as manufacturing exports surge

Fresh data from the Ministry of Industry and Trade (MoIT) showed that in the first seven months of this year, the total export turnover of manufacturing and processing items reached nearly $192 billion, accounting for 84.6 per cent of the country’s total export value, marking a 15.4 per cent increase compared to the same period last year.

Several product categories recorded big on-year export growth, including cameras and components (up 51.5 per cent); computers, electronics, and components (up 30 per cent); plastic products (up 30 per cent); wood and wooden products (up 23.3 per cent); assorted steel (up 9.8 per cent); equipment and machinery (up 19 per cent); and mobile phones and components (up 12.3 per cent).

The MoIT noted that goods exports have surged since the beginning of the year, particularly in the manufacturing and processing sector.

“A strong recovery is evident now,” the MoIT stated, attributing the rise in export turnover to the continued increase in foreign direct investment (FDI) in the sector.

According to the Ministry of Planning and Investment (MPI), the manufacturing and processing sector continued to lead in FDI attraction from January to July 20, with newly registered, newly added capital, and capital contributions in this sector totalling $12.7 billion – an increase of 16 per cent on-year, accounting for 70.5 per cent. Cumulatively, as of July 20, the sector had attracted nearly 17,460 valid ventures with registered capital of $296.1 billion, representing 60.8 per cent.

Samsung Electronics’ chairman, Lee Jae Yong, recently met with Vietnamese Prime Minister Pham Minh Chinh in Seoul, where he revealed plans to increase investment over the next three years, aiming to make Vietnam Samsung’s largest display module production base globally.

To date, Samsung has invested approximately $22.4 billion in Vietnam, making it the country’s largest foreign investor, with 90,000 jobs created. In 2023, Samsung Vietnam generates $55.7 billion from exports. Currently, 310 Vietnamese companies are partners in Samsung’s production chain.

Additionally, the Vietnam National Textile and Garment Group (Vinatex) reported that the country’s total export turnover from textile and garment products nearly reached $4.3 billion in July, up 12.4 per cent on-year and 16.1 per cent on-month.

“July was the first month in 2024 when textile and garment export turnover exceeded $4 billion, the highest since August 2022,” Vinatex noted.

In the first seven months of this year, the sector’s export turnover reached nearly $24 billion, marking an increase of $1.33 billion or nearly 6 per cent compared to the same period last year. Fibre exports contributed $2.53 billion (up 3.5 per cent), textiles and garments earned $20.2 billion (up 6.3 per cent), and textile and garment materials brought in $878 million (up 11.4 per cent).

Nguyen Viet Thang, a representative from Hanoi Garment and Textile Materials JSC, reported double-digit export growth in July and the first seven months of the year.

“Partners in Japan, South Korea, and the EU have increased their imports. We already have export orders lined up for the fourth quarter of this year,” Thang said. “Overall, textiles and garments companies are performing well thanks to the government’s supportive lending policies, improvements in the business climate, and recovering global demand.”

In 2025, the company plans to invest another $8 million to expand its production facility in the northern province of Hung Yen.

The MoIT projects better conditions for boosting industrial production and trade from now until the end of the year. “The global economy and trade are showing signs of recovery. Vietnam’s exports are forecast to continue growing positively. Global trade is expected to double in 2024 due to reduced inflation and the accelerating US economy,” the MoIT stated.

The US economy grew by 2.8 per cent on-year in the second quarter of this year, surpassing the 1.4 per cent growth in the first quarter and the earlier forecast of 2.1 per cent. This growth was driven by increased consumption, investment, and public expenditure. Moreover, US inflation in the second quarter rose by only 2.6 per cent, compared to a 3.4 per cent increase in the first quarter.

Vietnam’s exports to the US rose from $10.5 billion in June to nearly $11 billion in July, raising the seven-month total to $66.09 billion – an impressive 24.4 per cent on-year climb, or $13 billion. This growth makes the US Vietnam’s fastest-growing export market. Averagely, US monthly consumers spent nearly $9.5 billion on Vietnamese goods. Key Vietnamese exports to the US in the first seven months included computers, electronics, and components ($11.16 billion, up 51.6 per cent); mobile phones and components ($5.5 billion, up 34.3 per cent); machinery and equipment ($9.2 billion, up 15.8 per cent); garments and textiles ($7.2 billion, up 3.6 per cent); and wood and wooden products ($4.07 billion, up 24.6 per cent).

Agricultural exporter Vina T&T Group reported a surge in export orders from the US since the beginning of the year, resulting in a 26 per cent on-year increase in revenue over the seven-month period. “The US is our traditional market, and we export a wide range of products, including fruit, rice, and fish sauce, on a weekly basis. Our contracts have seen a significant increase in recent months,” said Vina T&T Group’s chairman Nguyen Dinh Tung.

The MoIT also noted that Vietnam’s material imports for domestic production have increased significantly, indicating that the country’s goods exports will likely continue to rise in the coming months.

The seven-month import turnover is estimated at nearly $213 billion, up 18.5 per cent on-year.

The government has set a goal that in 2024, the total export turnover will be $376 billion – up 6 per cent from the recorded figure in 2023 of $354.7 billion, and total import turnover will be $352.5 billion – up 8 per cent from $326.4 last year. Total trade surplus will be $23.5 billion.

According to the MoIT, with positive export performance since early this year, the whole-year export target will possibly be hit on the back of rising demands in the remaining months of the year. However, more efforts must be made.

“The MoIT is required to make frequent updates about the new developments and new regulations, standards, and conditions of foreign markets, and to advance recommendations for localities, associations, and enterprises so that they can adjust their production and business plans, and also can look for new orders from suitable markets,” stated the prime minister in a dispatch sent to ministries and localities on key related tasks for Q3.

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