Vietnam’s index of industrial production (IIP) in January fell 9.2% against the previous month and inched up 0.6% year-on-year, according to the General Statistics Office (GSO).
The manufacturing and processing sector grew by 1.6% compared to the same period last year, while electricity production and distribution increased by 0.4% and water supply, waste management, and treatment activities 9.2%. However, the mining sector experienced a decline of 10.4%.
Forty-seven cities and provinces recorded significant year-over-year growth, with remarkable industrial expansion seen in Nam Dinh province (29.9%), Bac Kan (28.5%), Ben Tre (24.2%), Binh Phuoc (17%), Kien Giang (16.6%), and Hai Phong (16.3%). In the electricity production sector, Tra Vinh stood out with a 56% surge while Khanh Hoa and Binh Thuan documented increases of 30.8% and 20.6%, respectively.
Conversely, Ca Mau experienced a 16.3% decline, followed by Gia Lai at 13.2%, and Ha Tinh at 10.4%. Major economic hubs also struggled with industrial production in the month, with Hanoi dropping 9.8%, Ho Chi Minh City 9.3%, and Da Nang 8.9%.
Key industries showed mixed performance in January. Motor vehicle production surged by 33.8%, while furniture manufacturing increased by 10.6% and leather and related product production 10.3%. The electronics and computer products and food production sector saw modest growth of 3.8% and 2.1%, respectively. However, pharmaceutical production declined by 29.1%, coal mining 20.1%, and electrical equipment production 11.5%.
In terms of specific products, automobile production jumped by 60.7%, television 50.1%, NPK fertiliser 13.7% while natural fiber fabric rose by 9.6% and clothing production 5%.
The number of workers in industrial enterprises posted a 0.2% month-on-month increase, and a 4.5% year-on-year growth as of January 1. Foreign-invested enterprises led employment growth with a 4.9% increase compared to the previous year.
According to Director of the GSO’s Industry and Construction Statistics Department Phi Thi Huong Nga, recent international supply chain shifts present significant opportunities for Vietnam. The country could achieve breakthrough industrial growth in 2025 and beyond by leveraging its advantages and accelerating digital and green transformation as well as meeting the increasingly stringent requirements of the international market.
The electronics and components sector has shown particular promise, while textile and footwear companies have secured orders through the first half of the year, she said, adding the wood processing industry has also shown significant recovery with continued high growth.
Vietnam’s industrial sector experienced positive growth in the January-May period, with 55 out of 63 provinces and centrally-run cities nationwide reporting annual increases in the Index of Industrial Production (IIP), according to the General Statistics Office (GSO).
The GSO identified manufacturing, processing, and electricity production and distribution as the primary drivers of the growth. Provinces recording high growth included Phu Tho (31.2%), Bac Giang (24.9%), and Binh Phuoc (14.8%). However, some other provinces like Ha Tinh, Quang Ngai and Ca Mau saw respective declines of 9%, 8.25% and 2.5% in their indexes.
Overall, the national IIP in May continued its upward trajectory, rising 3.9% month-on-month and 8.9% year-on-year. The five-month period saw an yearly increase of 6.8%.
A deeper analysis revealed the processing and manufacturing industries as the key contributor to the growth, boasting a 7.3% rise and adding 6.4 percentage points to the overall increase. The electricity production and distribution sector also performed strongly, with 12.7% growth, contributing 1.1 percentage points. Additionally, the water supply, waste, and wastewater management sector went up 6.3%, adding 0.1 percentage point. However, the mining sector experienced a decline of 5.2%, resulting in a reduction of 0.8 percentage point in the overall growth.
Specific product categories within the processing and manufacturing sectors posted impressive growth. Production of rubber and plastic products surged by 27.4%, while electrical equipment saw a 24% increase. Production of chemicals and chemical products grew by 20.1%, followed by beds, cabinets, tables, and chairs (19.6%) and metal products (13.2%).
In light of these findings, the GSO proposed a series of recommendations to further bolster Vietnam’s industrial development. It urged the Ministry of Industry and Trade (MoIT) to prioritise a structural shift toward increasing the proportion of processing and manufacturing industries within the overall industrial sector, while simultaneously reducing reliance on the assembly and processing of imported products; enhance enterprise competitiveness and incentivise the use of domestically produced goods via technical barriers for certain imports.
Additionally, the GSO recommended that the MoIT refine key institutions such as the Key Industrial Law and the Law on Chemicals. Expediting the disbursement of public investment capital and hastening crucial projects in the fields of electricity, oil and gas, manufacturing, processing, and mining are also highlighted as crucial steps.
Head of the GSO’s Industrial and Construction Statistics Department Phi Thi Huong Nga suggested that localities should launch more stimulus and promotion schemes to increase purchasing power while helping industrial firms find partners and expand markets through trade exhibitions.
Hundreds of millions of U.S. dollars are flowing into Cam Lam district, providing a major boost for Khanh Hoa as the province in south-central Vietnam accelerates its plans to develop an international-standard airport town.
A corner of Cam Lam district, Khanh Hoa province, south-central Vietnam. Photo by The Investor/Nguyen Tri.
The provincial People’s Committee recently issued decisions to select investors for four large urban complex projects, with a total investment exceeding VND22 trillion ($862.24 million) in Cam Lam district.
The Cam Tan Urban Complex spans over 290 hectares in Cam Tan and Suoi Tan communes, with a projected population of around 4,020 people and a total investment exceeding VND5.73 trillion ($224.6 million).
The Cam Thuong Urban Complex, at the cost of nearing VND6 trillion ($236.9 million), covers nearly 300 hectares in the same two communes and will be home to 4,010 people.
Located in Cam Tan and Cam Hoa communes, the 300-hectare Cam Hoa Urban Complex will have an investment of over VND5.24 trillion ($200 million) and house 4,410 people.
Lastly, the over VND5.1 trillion ($200 million) Suoi Tan Urban Complex, spanning nearly 240 hectares in Suoi Tan commune, will accommodate around 4,020 people.
The provincial People’s Committee also approved a list of projects seeking non-budget investments for the 2025–2030 period, including three projects in Cam Lam.
The most notable is the 10,365-hectare Cam Lam New Urban Area project, with an investment of VND285.3 trillion ($11.18 billion). This major project aims to create a new urban area and world-class entertainment zone, making it one of Khanh Hoa’s flagship initiatives for the 2025–2030 period.
Developing Khanh Hoa’s southern growth pole
Positioned between the coastal towns of Nha Trang and Cam Ranh, Cam Lam benefits from a highly convenient transportation network.
With 13 kilometers of coastlines, the district has attracted significant investment over the past 20 years, leading to the development of numerous resorts that have transformed the area.
In February 2024, Deputy Prime Minister Tran Hong Ha approved a master plan for the new Cam Lam Urban Area until 2045. The planned area covers the entire administrative boundary of Cam Lam district, totaling over 54,719 hectares (excluding the Thuy Trieu Lagoon area).
Under the master plan, Cam Lam is set to become the southern growth hub of Khanh Hoa and the south-central coastal region, contributing to the province’s ambition to become a centrally governed city. Vietnam currently has six centrally managed cities, namely Hanoi, Hai Phong, Danang, Hue, Ho Chi Minh City, and Can Tho.
The district will be developed into a modern, international-standard airport town, focusing on coastal tourism, logistics services, finance, global innovation, education, healthcare, and cutting-edge research. The goal is to create a high-quality living environment with modern infrastructure.
In August 2024, the Khanh Hoa People’s Committee approved a zoning plan (scale 1/2000) that covers the coastal sub-area, the central urban sub-area, and the northern urban sub-area of the new Cam Lam town.
The central urban sub-area aims to develop a new political-administrative center for Cam Lam, as well as an innovation hub that is part of a larger regional center.
The northern urban sub-area will focus on developing a new urban center, featuring a chain of golf courses, amusement parks, and specialized parks near Cu Hin Mountain.
Meanwhile, the coastal urban sub-area will serve as a tourism, service, and coastal urban zone, acting as the maritime gateway to the new town.
Real estate market recovery
Nguyen Anh Tuan, vice president of the Khanh Hoa Real Estate Brokerage Association, stated that the local real estate market has emerged from its most challenging period and showed clear signs of recovery in 2024.
The market’s recovery is driven by significant improvements in infrastructure and well-planned, long-term development schemes, such as the Nha Trang master plan for 2040 and the Cam Lam airport town master plan through 2045, he noted.
These initiatives have drawn considerable interest from investors, highlighting the region’s sustainable property market growth potential.
“The real estate market in Khanh Hoa, particularly in hotspots like Nha Trang and Cam Lam, has experienced a notable rise in prices over the past year. This surge has created pressure for both homebuyers and new investors, potentially driving property prices to unsustainable levels, which could pose risks to liquidity and long-term value stability,” Tuan added.
With a strong foundation for recovery in 2024, Tuan believed that the local real estate market will continue to grow substantially in 2025, supported by the ongoing improvements in infrastructure.
Notably, key projects such as the Khanh Hoa-Buon Ma Thuot Expressway and the expansion of Cam Ranh Airport will play a pivotal role in stimulating the market and attracting further investment.
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