Vietnam Manufacturing Tracker

Posted by Written by Vu Nguyen Hanh Reading Time: 9 minutes

The manufacturing sector is the cornerstone of Vietnam’s economic growth and resilience. The government has undertaken several initiatives to leverage the country’s inherent strengths, resulting in tangible outcomes supported by compelling data. The Vietnam Manufacturing Tracker by Vietnam Briefing offers the latest data, insights, and policy updates to keep foreign investors and analysts informed about the industry.


The second edition of The Asia Manufacturing Index by Dezan Shira & Associates is now out. The 2025 index provides essential insights into Asia’s dynamic industrial landscape, ranking eleven countries across eight categories, including tax policies, infrastructure, and innovation. Explore the rankings here

Over the past few decades, Vietnam has effectively leveraged its key advantages to become a major player in global supply chains, with its role gaining even more prominence amid the “China Plus One” production relocation strategy.

This growing importance is primarily driven by Vietnam’s labor-intensive manufacturing sector, characterized by relatively low labor costs, well-developed export infrastructure, and a strategic location on major trade routes.

The Vietnamese government has been proactive at both national and provincial levels, implementing measures such as national schemes, generous corporate income tax breaks for high-tech companies, and the development of specialized industrial zones.

Vietnam’s economic growth outlook

According to Vietnam’s General Statistics Office (GSO), the country’s GDP grew by 7.09 percent in 2024, despite external challenges. While this growth is slightly lower than in 2018, 2019, and 2022, it reflects a remarkable economic rebound. Quarterly data from the GSO indicates an upward tick in GDP in 2024, with growth increasing from 5.98 percent in Q1 to 7.55 percent in Q4.

During a session in February 2025, Vietnam’s National Assembly endorsed a supplementary socio-economic development plan targeting a 8 percent or higher growth rate, considerably exceeding the previously set 6.5 to 7 percent target. The proposed adjustment to the average consumer price index growth rate is around 4.5 to 5 percent of the GDP, in comparison to the previously approved rate of 4.5 percent.

The World Bank predicts Vietnam’s GDP growth could reach 6.6 percent in 2025, which is 0.6 percentage points higher than its June 2024 projection. Meanwhile, the International Monetary Fund (IMF) estimates a growth rate of 6.1 percent, and the Asian Development Bank (ADB) also forecasts 6.6 percent.

For further information, see: Vietnam’s Economic Outlook for 2025: Push for Digitalization and Sustainability

GDP and the value added by the manufacturing sector

The GSO reported that the industrial sector’s value-added contribution to GDP in 2024 increased by 8.32 percent year-over-year, contributing 2.7 percentage points to the economy’s overall growth rate.

Breaking this industrial contribution down:

  • Processing and manufacturing increased by 9.83 percent, contributing 2.49 percentage points;
  • Water supply, management, and treatment of waste and wastewater increased by 9.43 percent, contributing 0.06 percentage points;
  • Electricity production and distribution increased by 10.05 percent, contributing 0.37 percentage points; and
  • Mining activity decreased by 7.87 percent, reducing growth by 0.21 percentage points.

For further information, see: Vietnam Economy in 2024: GDP, Trade, FDI

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Year

GDP (US$ Billion)

Manufacturing Output (US$ Billion)

Manufacturing Value Added (% of GDP)

2017

277.07

63.66

22.63

2018

304.47

72.46

23.37

2019

331.82

79.53

23.79

2020

346.31

83

23.95

2021

370.08

89.64

24.46

2022

407.97

100.86

24.58

2023

433.7

102.63

23.88

2024

476.3

 

 

Source: IMF/World Bank

Vietnam Manufacturing Purchasing Managers’ Index (PMI)

The S&P Global Manufacturing PMI reflects the manufacturing sector’s performance by surveying 400 firms in the industry. The PMI is built on five weighted sub-indexes:

  • New orders (30 percent)
  • Output (25 percent)
  • Employment (20 percent)
  • Suppliers’ delivery times (15 percent)
  • Stock of items purchased (10 percent)

A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month, below 50 represents a contraction, while 50 indicates no change.

Vietnam’s monthly manufacturing PMI data – 2024-25

Month

Vietnam Manufacturing PMI (% Points)

January 2024

50.3

February 2024

50.4

March 2024

49.9

April 2024

50.3

May 2024

50.3

June 2024

54.7

July 2024

54.7

August 2024

52.4

September 2024

47.3

October 2024

51.2

November 2024

50.8

December 2024

49.8

January 2025

48.9

December 2025

49.2

Source: S&P Global

Interpreting the PMI scores

Vietnam’s manufacturing industry remained subdued into the second month of 2025, as low demand resulted in further declines in new orders and output. This has led to companies reducing their workforce for a fifth successive month.

In terms of pricing, the rate of input cost inflation fell to a 19-month low, while prices were lowered for the second consecutive month. Vietnam’s PMI remained below the no-change threshold of 50.0 for the third straight month in February, though it did rise slightly to 49.2 from 48.9 in January. This latest figure indicates a slight decline in business conditions throughout the month.

Key highlights from Vietnam’s PMI in February 2025:

  • Output and new orders continue to decrease
  • Employment declines for a fifth successive month; and
  • Selling prices are lowered as cost inflation eases.

Index of Industrial Production (IIP)

The IIP is an indicator that evaluates the growth rate of industrial production monthly, quarterly, or yearly. It reflects industrial production growth in general and the growth rate of each commodity in particular.

The IIP is calculated as a percentage of the industrial production generated in the current and base periods.

Vietnam’s IIP data – 2024-25

Index of Industrial Production 

Monthly Growth Rate (%)

Yearly Growth Rate (%)

January 2024

-4.4

18.3

February 2024

18

6.8

March 2024

20

4.1

April 2024

0.8

6.3

May 2024

3.9

8.9

June 2024

0.7

10.9

July 2024

0.7

11.2

August 2024

2

9.5

September 2024

-0.19

10.8

October 2024

4

7

November 2024

2.3

8.9

December 2024

0.8

8.8

January 2025

-9.2

0.6

February 2025

-2.2

17.2

Source: General Statistics Office of Vietnam

Interpreting the IIP scores

In the first two months of 2025, Vietnam’s IIP increased by 7.2 percent compared to the same period last year. Sector-specific performance of Vietnam’s IIP in the first two months of 2025 is as follows:

  • Manufacturing and processing industry increased by 9.3 percent, contributing 7.9 percentage points to the total increase.
  • Electricity, gas, steam, and air conditioning supply rose by 2.3 percent, contributing 0.2 percentage points.
  • Water supply, sewage, waste management, and remediation grew by 8.0, contributing 0.1 percentage point.
  • Mining and quarrying decreased by 6.5 percent, making the overall figure decline by one percentage point.

Employment in manufacturing

Affordable labor costs are a key advantage for Vietnam in attracting foreign manufacturers. Given the manufacturing sector’s critical role in the economy, its employment impact is also substantial. By 2023, the manufacturing sector employed the second-largest workforce in Vietnam, second only to agriculture.

According to the GSO, Vietnam’s manufacturing and construction sector employed 17.4 million people in 2024, accounting for 33.4 percent of the total employment. This represents anincrease of 167,000 workers compared to 2023.

Vietnam Employment in the Manufacturing Sector

Year

Total (million)

Contribution to total employment in Vietnam (%)

2017

9.54

17.8

2018

10

18.4

2019

11.29

20.7

2020

11.3

21.1

2021

11.21

22.8

2022

11.77

23.3

Preliminary 2023

11.96

23.3

Source: General Statistics Office

Note: (*) Data from 2021-2023 was calculated following the ICLS19 standard. Under ICLS19, people working to produce self-sufficient products in the agriculture, forestry, and fishery sectors will not be identified as employed as per the ICLS13 standard.

Foreign direct investment in Vietnam’s processing and manufacturing industry

Vietnam’s foreign direct investment (FDI) disbursement reached a record high of approximately US$25.35 billion in 2024, marking a 9.4 percent increase. Although total FDI commitments slightly decreased by 3 percent to US$38.23 billion, positive trends emerged with 3,375 new projects approved worth US$19.7 billion.

FDI inflows targeted 18 of Vietnam’s 21 economic sectors, with manufacturing and processing leading at US$25.58 billion, followed by real estate at US$6.31 billion. The Foreign Investment Agency noted that while total registered FDI declined, there was a significant increase in capital for existing projects (50.4 percent) and new projects (1.8 percent), reflecting strong investor confidence.

The FDI sector was crucial for Vietnam’s exports, generating around US$290.8 billion and accounting for 71.8 percent of the total, contributing to a trade surplus of nearly US$49.2 billion. By the end of 2024, Vietnam had attracted a cumulative US$502.8 billion in FDI, predominantly in manufacturing and processing, which totaled US$308.76 billion.

Tracking FDI into Vietnam’s Manufacturing and Processing Industry

Year

Number of new projects

Newly registered capital (US$ million)

Adjusted project number

Adjusted capital (US$ million)

Number of times of capital contribution to buy shares

Value of capital contribution, share purchase
(US
$ million)

2015

955

8,927.8

517

6,305.4

2016

1,020

9,812.57

861

5,132.55

290

593.51

2017

932

6,860.36

761

7,271.27

1,365

1,744.36

2018

1,065

9,067.46

743

5,093.78

1,528

2,426.80

2019

1,314

12,093.14

861

5,381.98

2,261

7,086.66

2020

800

7,190.77

680

4,593.86

1,268

1,816.46

2021

533

7,251.98

612

7,346.30

650

3,522.60

2022

511

7,213

644

7,977.90

471

1,611.06

2023

3,188

20,190

1,262

7,880

3,451

8,500

2024

3,375

19,730

1,539

13,960

3,502

4,540

Source: Open Development Vietnam/MPI

Vietnam’s merchandise exports

According to the GSO, Vietnam’s total export turnover in 2024 is expected to show positive growth despite numerous risks and uncertainties in the global economy. Preliminary reports indicate that the export turnover of goods for 2024 will reach approximately US$405.53 billion, representing a 14.3 percent increase compared to the previous year.

Of this total:

  • The domestic economic sector is projected to achieve an export turnover of US$114.59 billion, which is a 19.8 percent increase, accounting for 28.3 percent of the overall export turnover.
  • The foreign-invested sector, including crude oil, is anticipated to reach US$290.94 billion, reflecting a 12.3 percent increase, making up 71.7 percent of the total exports.

In 2024, there were 37 items with export turnover of over US$1 billion, accounting for 94.3 percent of total export turnover (with 8 items exported at turnover value of over US$10 billion, accounting for 69.0 percent). Electronics, computers, and components continue to be the leading export goods in terms of export value, dominated by Samsung, LG, Apple and electronic components manufacturing companies in Vietnam.

For further information, see: Vietnam’s Trade Performance in 2024: How to Read the Data

Some highlights of Vietnam’s key export merchandise in 2024 are as follows:

  • Electronics, computers, and components: Export value reached US$72.6 billion in 2024, an increase of 26.6 percent compared to 2023. This category accounted for 17.9 percent of the total export turnover.
  • Phones and components: Ranked second with an export turnover of US$53.9 billion, representing a growth of 2.9 percent.
  • Machinery, equipment, tools, and spare parts: Exports totaled US$52.3 billion, reflecting a 21 percent increase.
  • Textiles: This category generated US$37 billion in exports, up by 11.2 percent.
  • Footwear: Export value reached US$22.9 billion, marking an increase of 13 percent.
  • Wood and wood products: Exports amounted to US$16.3 billion, showing a growth of 20.9 percent.
  • Means of transport and spare parts: This sector reached US$15.1 billion in exports, up by 6.4 percent.

Vietnam’s Merchandise Exports by Manufacturing Sector

Year

Total merchandise exports (US$ billion)

Share of manufacturing sector (US$ billion)

2017

215.12

201.65

2018

243.7

230.76

2019

264.27

252.43

2020

282.63

271.04

2021

336.17

323.59

2022

371.72

362

Preliminary 2023

354.72

328.14

Source: General Statistics Office

Incentives for investing in Vietnam

Vietnam’s Law on Investment specifies the three forms of incentives that are available to companies operating within the country:

  • Corporate income tax (CIT) incentives, including various preferential tax rates and tax holiday rates;
  • Import duty incentives; and
  • Exemption or reduction of land rents and levies.

The CIT incentives can be granted to investments based on whether they belong to prioritized or government-encouraged sectors and/or are established in economic zones or disadvantaged locations, etc.

Read more: Tax Incentives for Foreign Enterprises in Vietnam

Industrial park classification in Vietnam

Industrial parks in Vietnam fall under three categories according to Decree No. 82/2018/ND-CP on the management of industrial parks and economic zones. These are as follows:

  • Export processing zones: Industrial parks focused on manufacturing goods for export and providing services to support production for export. These zones must comply with the conditions, processes, and procedures outlined in the Decree.
  • Auxiliary industrial areas: Industrial parks specializing in manufacturing auxiliary products and providing related services. Up to 60 percent of the rentable industrial land within these parks can be leased or re-leased for auxiliary industry projects.
  • Eco-industrial parks: Industrial parks that emphasize cleaner production, efficient use of natural resources, and cooperation among enterprises to enhance economic, environmental, and social benefits through industrial symbiosis.

Vietnam’s national policy framework for manufacturing development

Recognizing the importance of the manufacturing sector and industrial development to the health of the overall economy, Vietnam’s government has implemented several national schemes to further promote these areas.

Strategy on exports and imports for 2011-2020, with a Vision to 2030

Former Prime Minister Nguyen Tan Dung approved the Strategy on Exports and Imports for 2011-2020, with a Vision to 2030 in his Decision 2471/QD-TTg dated December 28, 2011.

This framework outlines specific targets and implementation strategies for the manufacturing sector:

  • Export orientation: Focus on developing high-tech and advanced products in the processing and manufacturing industries.
  • Production and economic restructuring: Encourage and attract investment in supporting industries to meet domestic needs and integrate into the global supply chain, particularly in manufacturing mechanics, electronics, automobile components, textiles, footwear, and high technology.

Industrial Development Strategy Through 2025, with a Vision to 2035

The Industrial Development Strategy Through 2025, with a Vision Toward 2035, was approved under Decision No. 879/QD-TTg dated June 9, 2014. This strategy set specific development priorities for the following processing and manufacturing sub-sectors:

  • Mechanical engineering and metallurgy;
  • Chemicals;
  • Agricultural, forestry, and fishery product processing; and
  • Garments, textile, leather, and footwear.

National Industrial Development Policy by 2030 with a Vision to 2045

Resolution No. 23/NQ-TW, dated March 22, 2018, outlines the National Industrial Development Policy for 2030 with a Vision to 2045. The specific targets to be achieved by 2030 include:

  • Industry is expected to contribute over 40 percent of GDP, with the processing and manufacturing sector accounting for around 30 percent and manufacturing alone for over 20 percent.
  • The proportion of high-tech products in the processing and manufacturing sector will reach at least 45 percent.
  • The industrial added value growth rate will average over 8.5 percent, with the processing and manufacturing sector growing over 10 percent annually.
  • Labor productivity in the industry will grow by 7.5 percent per year.
  • The Competitive Industrial Performance (CIP) Index will rank among the top three ASEAN countries.
  • The proportion of labor in the industrial and service sectors will exceed 70 percent.
  • Development of large-scale, multinational, and globally competitive industrial clusters and enterprises.

Socio-Economic Development Plan for 2021-2025

The government’s action plan designated in Resolution No. 99/NQ-CP implements the Socio-Economic Development Plan for the five-year period from 2021 to 2025. The action plan states its specific objectives related to the manufacturing sector, which are:

  • Average GDP growth rate in this 5-year period to reach about 6.5 – 7 percent;
  • Proportion of processing and manufacturing industry in GDP to reach over 25 percent;
  • Digital economy to account for about 20 percent of GDP; and
  • Contribution of total factor productivity (TFP) to growth to be about 45

National Green Growth Strategy for 2021-2030, Vision Towards 2050

Aiming to empower the economy through a green growth transition, Vietnam’s government issued Decision No. 1658/QD-TTg approving the National Green Growth Strategy for 2021-2030 with a Vision Towards 2050. Key goals are:

  • Reducing the level of energy consumption in manufacturing, transportation, commercial, and industrial activities
  • Facilitating the conditions for the development of new green manufacturing industries; and
  • Encouraging the application of green technologies along with manufacturing activity management and control systems.

This article was last updated March 18, 2025.

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