Manufacturing sector expands 12.5% in eight months

According to a socio-economic report for August and the first eight months of 2026 released by the National Statistics Office under the Ministry of Finance on September 3, industrial production continued to maintain its positive growth momentum in August. The IIP rose 1.5% month on month and 14.4% year on year.

Overall, the IIP increased 11.9% in the first eight months of 2026 compared with the same period last year, marking the highest eight-month growth rate in many years.

In August, the IIP of the processing and manufacturing sector increased 14.6% year on year, while water supply, waste management and treatment activities rose 9.5%. Electricity production and distribution increased 11.8%, while mining and quarrying rose 18.5%.

In the first eight months of 2026, the processing and manufacturing sector’s IIP increased 12.5%, compared with a 10.0% rise in the same period of 2025, contributing 9.6 percentage points to overall industrial growth. Mining and quarrying increased 8.1%, reversing a 2.1% decline in the same period last year and contributing 1.3 percentage points.

Electricity production and distribution rose 10.1%, compared with 5.0% in the same period of 2025, contributing 0.9 percentage points. Water supply, waste management and treatment activities increased 9.4%, compared with 8.8% a year earlier, contributing 0.1 percentage points.

Several key two-digit industrial sectors recorded strong growth in the first eight months. Metal production rose 22.4%, beverage production 16.4%, motor vehicle manufacturing 15.9%, electrical equipment manufacturing 14.6%, and the manufacture of electronic products, computers and optical products 13.9%.

Furniture manufacturing increased 12.7%, while the manufacture of other non-metallic mineral products rose 12.6%. Rubber and plastic product manufacturing increased 12.3%, while wood processing and the manufacture of products from wood, bamboo and rattan, excluding furniture, rose 12.2%.

Chemical and chemical product manufacturing, as well as crude oil and natural gas extraction, both increased 11.9%, while food processing rose 11.6%.

By contrast, the leather and related products sector recorded a more modest increase of 3.6%, while hard coal and lignite mining declined 1.8%.

Notably, the IIP increased year on year in all 34 provinces and centrally governed cities during the first eight months of 2026. Several localities recorded strong growth driven by the processing and manufacturing sector and robust electricity production and distribution.

Ha Tinh posted the highest growth at 38.0%, followed by Quang Ninh at 31.8%, Ninh Binh at 26.1%, Nghe An at 25.7%, Thai Nguyen at 22.6%, and Phu Tho at 22.1%.

In electricity production and distribution, Ha Tinh recorded growth of 51.4%, followed by Phu Tho at 18.7% and Bac Ninh at 12.8%.

Meanwhile, several localities recorded slower IIP growth as their processing and manufacturing, mining and quarrying, and electricity production and distribution sectors expanded at a slower pace or contracted.

Several major industrial products also posted significant increases in the first eight months of 2026. Motorcycle production rose 27.9%, followed by laptop computers at 25.7%, automobiles at 24.0%, rolled steel at 23.4%, processed seafood at 21.4%, refined sugar at 18.5%, bar and angle steel at 15.2%, beer at 14.4%, and chemical paints at 12.2%.

On the other hand, production of NPK compound fertilizer fell 8.6%, monosodium glutamate 8.1%, leather footwear 4.2%, and liquefied petroleum gas (LPG) 3.2%.

Maintaining stable and sustainable growth momentum in the final months of the year

Also on September 3, S&P Global released the results of the Viet Nam Manufacturing Purchasing Managers’ Index (PMI) for August 2026.

The manufacturing PMI rose to 53.3 points in August, up from 52.9 points in July and remaining above the 50-point threshold for the 14th consecutive month. The result indicated that business conditions in the manufacturing sector continued to improve strongly, with the pace of improvement reaching its highest level since February.

Dr. Nguyen Quoc Viet, a public policy expert at the University of Economics, Vietnam National University, Hanoi, said the increase in industrial production across all 34 localities in recent months showed that the industrial sector was returning to a stronger growth trajectory.

According to Dr. Nguyen Quoc Viet, growth in processing and manufacturing and key industrial sectors is significant not only for the production sector itself.

“Strong growth in processing and manufacturing and key industrial sectors will stimulate private investment, create jobs and raise incomes, thereby generating spillover effects for the services sector and domestic consumption,” Dr. Nguyen Quoc Viet said.

In practice, industry has a strong spillover effect on the wider economy. As businesses expand orders and increase production, demand for raw materials, logistics, labour and supporting services is also activated. Industrial growth is therefore measured not only by output, but also by its potential to generate spillover effects on investment and consumption.

Assessing the manufacturing sector’s growth momentum, Tran Viet Hoa, Director General of the Industry Agency under the Ministry of Industry and Trade, told Cong Thuong Newspaper that, with a positive growth foundation established over the first eight months and the proactive efforts of the business community, the industrial sector is expected to remain an important growth driver and contribute to achieving Viet Nam’s economic growth target for 2026.

In particular, key industrial sectors such as power generation and electronics; metallurgy, iron and steel; textiles, garments, leather and footwear; mechanical engineering and manufacturing, automobiles and motorcycles; and mineral extraction and processing continue to develop.

Some export-oriented industries, including electronics, textiles and garments, and leather and footwear, have established strong positions in international markets, ranking highly in terms of exports both regionally and globally.

The Ministry of Industry and Trade will focus on promoting the development of supporting industries, increasing localization rates, encouraging enterprises to adopt new technologies and accelerate digital transformation, and improving productivity and product quality to strengthen the competitiveness of the industrial sector.

At the same time, solutions are needed to support sectors recovering at a slower pace, diversify export markets and expand the domestic market. These efforts will help lay a foundation for industrial production to maintain stable and sustainable growth during the remaining months of 2026.

The Ministry will also accelerate the restructuring of industrial and supply chains, promote deeper industrial production and strengthen domestic production capacity, contributing to the establishment of a new growth model.

The implementation of large-scale industrial projects will be accelerated, while linkages between domestic and FDI enterprises will be strengthened to encourage Vietnamese businesses to participate more deeply in strategic supply chains in international markets.

These efforts are expected to create fresh momentum for industrial production and support the country’s goal of achieving double-digit growth.

The Ministry of Industry and Trade will continue to effectively implement working programs with localities and support businesses, capitalize on growth momentum in key economic regions, and contribute to the target of achieving double-digit growth in industrial production.