High hope in fourth quarter
The majority of processing and manufacturing companies in Vietnam are upbeat over their fourth-quarter business, thanks to positive macro-economic prospects.
According to the General Statistics Office (GSO)’s recent survey conducted on 4,028 domestic and foreign companies in the industry, up 87.9% of foreign invested firms perceived their business outlook as “positive” in the last quarter of 2015. In particular, those in medicine, pharmacognosis, tobacco, electronics, computer, furniture, and paper industries are forecast to have the most positive business prospects.
The optimism for future business stems from better business performance in the third quarter among 80.1% of the surveyed companies.
The decisive factors that have helped increase business confidence include a stable monetary policy, a 6.5% on-year growth of the gross domestic product (GDP) between January and September, economic expansion forecasts of 6.5% for 2015 and 6.6% for 2016, the lowest on-month level over the past 10 years in the consumer price index in September, and a 9.8% on-year increase in total retail sales and service revenue in the first three quarters.
 |
With stable macro-economic prospects, 53.5% of foreign-invested businesses projected that their production would increase further in the last quarter, which would result in a stable and rising trend in labour recruitment among 92.6% of the surveyed businesses in the foreign-invested sector.
Regarding orders, 47.8% of the foreign investors are optimistic to see a rapid rise in new orders. Among the sectors, medicine and pharmaceuticals, and electronics and computers have the highest number of positive firms, with respective rates of 58.3% and 56.1%.
In terms of inventories, 50.3% of domestic and foreign firms forecast that product inventory would remain stable between October and December, while just 16.2% stated that the volume of products in stock would increase. Meanwhile, compared to the third quarter, the volume of material inventories would remain stable or decrease, according to 85.1% of companies.
According to the GSO, Vietnam attracted an estimated US$17.15 billion worth of foreign direct investment in the year to September 20, posting a strong rise of 53.4% from the same period last year. Among the sectors, the processing and manufacturing industry was the most attractive to foreign investors, with a total registered capital of US$11.37 billion.
Currently, the processing and manufacturing industry contributes 18% to Vietnam’s GDP.