HCMC: Slow Industrial Growth in First 5 Months

Particularly, foreign direct investment (FDI) saw a rapid decline with high rate of inventories and weak purchasing power. In comparison with the growth rate year by year, that of the city’s industrial production in the first 5 months went down and was lower than the national average. The increase of industrial production in 5 months was 4.6 percent, while that of the whole country was 5.2 percent.

 

In addition, it was stated by the Department of Industry and Trade that the sharp decline in attraction of FDI caused negative impacts to industrial production results. Total FDI, including additional capital, of HCMC in the first 5 months was only US$362.1 million, down 43.2 percent year on year.

 

For electronics manufacturing, the inventory witnessed continuous increase due to fierce competition from imported products and low purchasing power. The building material industry has also faced similar difficulties with many projects cut down and decrease in needs for house construction and repair.

 

In the first 5 months, only some industries see positive signs such as textile-garment, leather footwear, food and beverages. Many textile companies in the city have received orders for the end of Quarter II of 2013. Such abundant orders have helped stabilise jobs for over 306,000 workers in the city. Similarly, the number of orders for export leather footwear is also significant with about 80 percent of enterprises receiving orders through the end of June 2013.

 

In the last months of 2013, the industries that are forecast to have declining inventories include garment-textile, leather footwear, plastic products, electric appliances and automobiles. Without any measures from the businesses to balance production and market demand, there will be the risk of maintained high inventories for industries of building materials, electronic products, equipment and machinery, chemicals and metal products.