Hanoi (VNA) – Vietnam’s industrial production in the second quarter of 2025 continued to grow, with the Industrial Index of Production (IIP) estimated to rise by 10.3% year-on-year, including a 12.3% increase in the processing and manufacturing sector, according to the latest report from the National Statistics Office (NSO) under the Ministry of Finance.

For the first half of 2025, the IIP rose by 9.2% compared to the same period last year, marking the highest growth rate since 2020, the office reported.

The report highlights notable growth in key industries during the first six months of 2025, including a 31.5% increase in motorised vehicle manufacturing, 17.1% in leather and related products, 17% in rubber and plastic products, 15.1% in garment production, 14.1% in other transport means, and 13.7% in other non-metallic mineral products.

Conversely, some sectors experienced modest growth or decline, such as beverage production increasing by only 1.9%, electrical equipment manufacturing by 1.1%, and crude oil and natural gas extraction decreasing by 8.2%.

Regarding regional performance, 62 localities recorded growth in the IIP in the first half of 2025 compared to the previous year, with former Ba Ria – Vung Tau province (which is now part of Ho Chi Minh City) reporting a 2.6% decline.

High growth rates in several localities were attributed to strong performance in processing and manufacturing industries, as well as in electricity production and distribution. In contrast, regions with slow or negative growth faced declines or stagnation in these same sectors.

The office noted that the ongoing transition to a two-tier local administration model reduces administrative layers and procedures, facilitating greater business autonomy in planning production activities.

Additionally, intensified efforts against counterfeit goods have stimulated enterprises to increase output. Accelerated progress in public investment projects and increased foreign direct investment (FDI) in real estate have further supported growth in construction-related materials industries such as cement, concrete, and steel.

Export-oriented sectors, including electronics, textiles and garments, and footwear, maintain competitive advantages, bolstered by a framework deal with the US on lower export tariffs as compared to other countries. FDI continued to flow predominantly into processing and manufacturing, particularly in electronics and computing industries, which remain the primary drivers of industrial growth for the remainder of 2025.

While some sectors still show growth, their momentum has slowed in the second quarter of 2025. For instance, wood processing and wood products grew by 16.2% in the first quarter but only 5.8% in the second, while production of beds, wardrobes, tables, and chairs increased by 12.6% in the first quarter and 10.9% in the second.

Inventory levels in the processing and manufacturing sector have risen significantly, averaging 85.7% in the first half of 2025 compared to 76.9% in the same period last year.

Despite challenges and global cost pressures, the National Statistics Office expects Vietnam's industrial production to maintain its growth trajectory in the latter half of 2025, driven mainly by FDI in processing and manufacturing, shifts toward green technology sectors, and large-scale publi💖c investment. However, sustaining high growth will require businesses to remain flexible, proacti😼ve, and to improve domestic supply chains./.