The billion-USD Halal market, fueled by a surging global Muslim population, is considered one of the drivers for Vietnam's exports in the future.

DDA Vietnam, which specialises in organic products, is one of the Vietnamese enterprises seeking opportunities in the market.

Nguyen Thi Anh Nguyet, a representative of company, stated that it is completing the Halal certification to export organic calcium products made from chicken eggshells to Middle Eastern countries.

Statistics show that nearly 60 provinces and cities nationwide have exported products to the global Halal market, but only about 1,000 enterprises have been certified.

With strict regulations of Halal standards, Vietnam's current exports are mainly farm produce, and raw materials for some industries. Therefore, it holds a modest position among global suppliers of these products. Additionally, the Halal market is still very new to many domestic enterprises, despite Vietnam's advantages in raw materials and geographical location.

According to Nguyen Minh Phuong from the Department of Asia – Africa Markets under the Ministry of Industry and Trade (MoIT), the global Halal market holds great potential, with 25% of the world's population being Muslim and the total trade value of Halal products hitting an estimated 2.3 trillion USD and continuing to grow.

Products with strong demand include food, cosmetics, pharmaceuticals, and fashion items. Prices of Halal products are usually 5-10% higher and consumers who want to use Halal products are willing to pay for them.

However, to be able to successfully penetrate and compete with other rival suppliers in the market, businesses need to learn and grasp business practices, consumption culture, and market regulations, said experts.

Le Chau Hai Vu, a consultant for building Halal food quality, said businesses need to have accurate knowledge of market trend, religious practices, business and consumption culture, and preferences, and meet specific standards for packaging and advertising.

Vietnamese Trade Counsellor in Saudi Arabia Tran Trong Kim advised businesses to conduct market research and inquire about regulations of host countries regarding quality management and food safety.

For deals with import businesses in this region, it is necessary to sign payment contracts using letters of credit (LC) with a deposit, Kim said, warning that exporters should not pay in advance any fees related to contract brokerage or invoice issuance as these are common fraudulent practices.

The MoIT is building a project to support exporters and producers of Halal products, aiming to further boost the export. Additionally, the National Trade Promotion Programme is also a channel to support businesses in participating in networking and trade promotion activities with the Halal markets.

Assoc. Prof. Dr. Nguyen Thuong Lang from the National Economics University said that with its foreign trade development strategy, Vietnam should focus on effectively and sustainably exploiting the Halal market./.

Int’l fair bolsters trade among East - West Economic Corridor countries

An international trade, tourism, and investment fair kicked off in the central city of Da Nang on August 2, aiming to showcase products of and enhance business ties between Vietnam and other countries along the East - West Economic Corridor (EWEC).

The event features nearly 300 booths of 150 enterprises from central and Central Highlands localities of Vietnam located along the EWEC.

A wide range of products are on show, including household appliances, handicrafts, souvenirs, food, electrical items, electronic and telecommunications equipment, technological devices, consumer goods, along with educational and healthcare products. Typical industrial products, tourism services, and those under the One Commune, One Product (OCOP) programme are also introduced to visitors.

Products from some countries are displayed by their representative agencies, including the Cambodian Ministry of Commerce, the Lao Ministry of Information, Culture and Tourism of Laos, the embassies of Myanmar and Indonesia in Hanoi, the consulates general of China, the Republic of Korea and Laos in Da Nang, the Malaysian tourism authority, and the trade office of Thailand in Ho Chi Minh City.

A business matching and export promotion conference will also take place as part of the event to share information about foreign markets, opportunities for exploring new markets, and some noteworthy issues for exporters.

In his opening remarks, Deputy Minister of Industry and Trade Nguyen Hoang Long said the annual fair aims to introduce socio-economic development achievements, along with investment, trade, and service development potential of the localities and countries along the EWEC.

He said the event is an occasion for enterprises to access consumers, boost trading, and seek partners, thereby helping strengthen Vietnam’s cooperation with other EWEC countries.

The fair, held by the Trade Promotion Agency under the Vietnamese Ministry of Industry and Trade, is scheduled to last through August 7.

Initiated in 1998, the EWEC is an economic development cooperation programme in the Mekong sub-region. The 1,450km route starts in Mawlamyine city of Myanmar and ends in Da Nang of Vietnam, linking four countries in the Indochinese Peninsula, namely Myanmar, Thailand, Laos, and Vietnam. It aims to foster economic, trade, and investment cooperation among the countries, reduce transportation cost, facilitate trade in goods, and support development in the localities it runs through./.

Top 50 prestigious and effective public companies 2024 announced

Vietnam Report and VietNamNet newspaper announced the Top 50 prestigious and effective public companies (VIX50) in Vietnam 2024 during a ceremony on August 2.

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) topped the ranking, followed by tech giant FPT Corporation, real estate developer Vinhomes, Asia Commercial Joint Stock Bank (ACB), Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank), Military Commercial Joint Stock Bank (MBBank), Bank for Investment and Development of Vietnam (BIDV), Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and Gemadept Corporation.

Since 2021, Vietnam Report has annually revealed the VIX50 ranking, which recognises the prestigious and effective public companies. This ceremony stands as a distinguished and influential gathering within the Vietnamese business community, underscoring acknowledgment and esteem for public companies exhibiting high efficiency and responsibility in the economy.

The ranking serves as a reputable yardstick, enabling enterprises to garner heightened attention and favourable reviews from investors, financial institutions and the media. This accolade also serves as a catalyst for businesses to persist in their growth and enhance market standing.

Following two years marked by the impacts of stringent monetary policies and exchange rate fluctuations, the Vietnamese stock market anticipates numerous new growth prospects this year. Notably, amidst the Government's resolute commitment to bolster the stock market by 2025, focusing on sustainable development, safety, and transparency, establishing and upholding reputation emerges as paramount for public enterprises.

The influence of reputation plays a pivotal role in investor sentiment, serving as a cornerstone for sustainable growth and the escalation of corporate value.

Vietnam Report acknowledges the Top 50 prestigious and effective public companies in 2024 to celebrate public enterprises with a robust financial footing, notable accomplishments in delivering products and services to customers, and establishing an impressive reputation among the public and investors.

The recognised representatives not only showcase excellence in financial resilience and communication but also exhibit potential for growth, a level of sustainable development, quality governance and standing within their respective industries.

As part of the event, the organising committee also announced the Top 10 prestigious companies in the banking, insurance, technology, and high-tech agriculture sectors in 2024. This recognition aims to appreciate and honour experienced, esteemed, and reputable enterprises that contribute positively to the industry's overall advancement and the Vietnamese economy at large, deserving of the title of "industry leaders" in vital economic sectors.

Notably, the announcement ceremony for the Top 50 prestigious and effective public companies this year was elegantly held concurrently with the Vietnam Top 500 CEO Golf Championship 2024 (VCG500). This annual golf tournament, serves as a sophisticated and contemporary platform that brings together leading figures from prominent Vietnamese enterprises, including VIX50 enterprises, fostering connections, knowledge sharing, and expanding business collaboration opportunities./.

HCM City accelerates public spending to achieve 7.5% growth target this year

Ho Chi Minh City will accelerate public spending, stimulate consumption, and expand export markets to achieve a growth rate of 7.5% this year, its leader has said.

Speaking at a meeting on August 2, Phan Van Mai, Chairman of the municipal People’s Committee, said that to realize this year’s growth target, the city will focus on accelerating public spending for the rest of the year to achieve the growth target, as it has not met its public spending target so far this year.

It has disbursed only 11.8 trillion VND (467.93 million USD) of public investment in the first seven months, or only 14.9% of the annual plan. It aims to disburse 90% of the allocated budget of 86 trillion VND this year.

“At the current rate, it must disburse a minimum of 10 trillion VND each month until the end of the year,” he noted.

The city official has urged contractors of major projects to report any challenges encountered promptly.

He even warned of implementing stringent measures against contractors who fail to perform adequately or do not comply with established standards.

The city has directed agencies to reduce the timeframe required to appraise and approve investment projects by no less than 30%.

A steering committee comprised of specialised groups and project teams has been established to oversee the quality and progress of key initiatives.

In addition, while the city’s exports totaled $26.1 billion this year, up 10.4% year-on-year, there are signs of a slowdown in export growth, according to the Statistics Office.

Major export markets for HCM City such as the US and China are expected to see significant growth in the second half, benefiting its exports.

However, these economies also face challenges that could impede recovery, posing potential risks to export activities.

Mai said the city would also promote domestic consumption and investment to improve total demand this year.

Diversifying export markets and exploring new markets are also crucial strategies to bolster production and business operations, he added.

In addition, the city will prioritise the development of high-tech and green industries.

A recently published report entitled HCM City Macroeconomic Report: Recovery and Challenges forecasts continued economic growth for the city throughout the year.

The annual report, published by the University of Economics of HCM City (UEH) in collaboration with the Statistics Office, showed a resurgence in total demand across multiple indicators related to consumption, investment, and exports.

Achieving a growth target of 7-7.5% this year remains feasible, provided that the global economy continues to recover favourably, according to the report.

Based on data from the first half of the year, the report highlighted a stable economic recovery in Vietnam’s largest city.

The city’s Gross Regional Domestic Product (GRDP) witnessed a growth of 6.46% in the first half.

Its index of industrial production (IIP) was up by 6.2% year-on-year, the highest growth rate in the past three years.

It also saw a 10% year-on-year rise in total retail sales of goods and services in the period./.

Vietnam, RoK step up cooperation in digital transformation, AI

Minister of Information and Communications Nguyen Manh Hung paid a working trip to the Republic of Korea (RoK) in early August, aiming at bolstering cooperation between the two countries in the areas of digital transformation and AI.

At a working session with Minister of Science and ICT Lee Jong-ho, Hung stressed that Vietnam is promoting economic growth based on digital technology, as well as boosting the development of IT and communications, particularly Artificial Narrow Intelligence and Specialised AI - the areas that need international cooperation in policy sharing and human resources training.

The two ministers discussed cooperation measures on the basis of the visions and policies to boost digital innovation for growth, and pledged to enhance cooperation in the domains of ICT, with the focus given to AI research and development, and high-quality human resources training for the semiconductor technology.

The Vietnamese minister also had discussions with representatives from the RoK’s Digital Platform Government, and the Ministry of Science and ICT (MSIT)’s National Information Society Agency, Korea Internet & Security Agency and National IT Industry, who provided the Vietnamese side with information related to the RoK’s ICT policy research and making.

During his stay in the country on August 1-2, Hung visited and had a working session with the Seoul Cyber University (SCU) and attended the inaugural ceremony for the coordination training office between Vietnam’s Posts and Telecommunications Institute of Technology and the SCU. He congratulated the two establishments for their effective cooperation, and highlighted that the SCU’s digital university model is an advanced one and a example for Vietnamese universities.

On the occasion, the Ministry of Information and Communications joined hands with the MSIT and related associations of the two nations to organise the Vietnam – RoK digital forum, drawing the participation of 20 technology firms from Vietnam, and 150 representatives from RoK associations and enterprises.

This was an opportunity for the Vietnamese ICT business community to promote trade and seek international partners in the RoK. Besides, it also helped promote coordination and sharing of policies, initiatives and advanced technology measures between the two nations.

Hung also had talks with Vietnamese students who are studying ICT, and visited FPT representative office in the RoK./.

Vietnam - destination for pioneering industries

Vietnam boasts potential to attract investments in pioneering industries, and solutions are needed to materialise such opportunities, insiders have said.

Earlier this month, Foxconn Group received the green light from the northern province of Quang Ninh’s authorities to launch two projects worth 551 million USD in the locality. These projects, aimed at produsasacing smart entertainment products and smart systems, fall within Quang Ninh’s target industries for investment in processing and manufacturing.

With these initiatives, Foxconn's total investment in Quang Ninh rises to nearly 1 billion USD and surpasses 3 billion USD in Vietnam overall. The company is involved in large-scale electronics and components projects in the northern provinces of Bac Giang and Bac Ninh, including the manufacturing of equipment and components for Apple. Last month, Foxconn also invested 383 million USD in a project at the Nam Son Hap Linh Industrial Park in Bac Ninh.

Meanwhile, the Amkor Group recently obtained an amended investment certificate to boost its investment by an additional 1.07 billion USD for its semiconductor project in Bac Ninh. This decision has propelled the total investment in the Amkor project to 1.6 billion USD, a staggering 11 years ahead of schedule. Initially, Amkor had projected to invest only 1.6 billion USD in Vietnam by 2035.

In addition to these two investors, recent reports indicate that numerous prominent technology corporations like Samsung, LG, and industry giants such as Hyosung, CJ, and Posco are gearing up to inject billions more into Vietnam in the near future.

During a recent meeting with Prime Minister Pham Minh Chinh as part of his official visit to the Republic of Korea, Jeong Cheol-dong, CEO of LG Display, said LG had already poured over 5 billion USD into investments in Vietnam and planned to invest an extra 3 billion USD over the next five years. As part of this expansion, the LG Innotel factory aimed to double its capacity, solidifying LG's integrated production hub in Vietnam. Jeong added that LG viewed Vietnam as its critical manufacturing hub.

Meanwhile, Samsung has long regarded Vietnam as a global manufacturing hub, having invested over 22.4 billion USD and consistently increasing its capital in recent years by an average of around 1 billion USD annually. With the opening of its Research and Development (R&D) Centre in late 2022, Samsung has designated Vietnam as the group's global R&D hub - a designation that Vietnam had never anticipated.

This, however, is just the beginning, as Vietnam is increasingly becoming a focal point for global corporations in the semiconductor and AI sectors. Companies like Intel, Amkor, HanaMicron, Marvell, and Synopsys have already invested in the country and continue to do so.

Meanwhile, NVIDIA Corporation is progressively actualising its vision of making Vietnam its “second home”.

Minister of Planning and Investment (MPI) Nguyen Chi Dung recently engaged in an online discussion with NVIDIA to explore further collaboration plans.

The interest of tech giants in Vietnam is palpable. In a recent statement, the MPI highlighted that not only would numerous large-scale projects spanning semiconductors, energy (including battery production, photovoltaic cells, and silicon bars), component manufacturing, electronics, and high-value-added products see fresh investments and expanded capital in the first half of this year, but Vietnam also held promise in attracting investments across cutting-edge industries like AI, semiconductors, hydrogen, and renewable energy.

The MPI is currently finalising a draft decree concerning the establishment, management, and utilisation of the Investment Support Fund. This initiative aims to provide support from the Government to high-tech enterprises, companies engaged in producing high-tech goods, and those undertaking high-tech application projects.

According to Statista Market Insights, Vietnam is poised to experience a Compound Annual Growth Rate of 11.6% in semiconductor revenue from 2023 to 2027, reaching 31.28 billion USD by 2027. Within this projection, integrated circuits, the cornerstone of the semiconductor industry, are anticipated to hit 16.44 billion USD this year.

Google's forecast suggests that Vietnam's digital economy is set to surge eleven-fold by 2030, reaching 220 billion USD, nearly half of the country's current GDP. AI will play a pivotal role in Vietnam's realisation of these forecasts, according to Marc Woo, managing director of Google Asia Pacific for Vietnam.

The forecast appears clearly optimistic. However, given the intensifying competition for investment attraction, Vietnam must act swiftly in the present landscape; otherwise, it would miss out on this unparalleled opportunity.

In a recent report to the Government, Dung highlighted the persisting challenges facing the economy, noting that emerging sectors like the digital economy, green economy, AI, chips, and semiconductors are lagging, risking Vietnam’s competitiveness on a global and regional scale.

The MPI reported that despite a steady rise in foreign investment in Vietnam, the number of large-scale projects with advanced technology remained limited. Vietnam has attracted only 108 projects exceeding 500 million USD in investment, averaging 15 projects annually, with a mere 27 falling within the high-tech sector.

“Immediate steps are required to cultivate skilled human resources, particularly in semiconductor electronics to sustain and enhance investment appeal. Simultaneously, addressing local electricity shortages in regions housing numerous electronics industry ventures is imperative. Additionally, streamlining processes to simplify and expedite post-investment registration procedures, such as obtaining construction permits and fire safety certifications, is crucial,” Dung said.

However, this is just one of the challenges. The pressure to compete for foreign investment in the high-tech sector is intensifying, with many countries, including the US, Europe, the RoK, Japan, Malaysia, Indonesia, and Thailand, requiring substantial investment support policies.

The RoK, for instance, has unveiled a 26 trillion won (approximately 19 billion USD) support initiative to bolster the chip industry. Malaysia issued the New Industrial Master Plan 2030 by the end of 2023, with an estimated scale of around 20 billion USD, aimed at revitalising Malaysia's industries, particularly in electronics, chemicals, electric vehicles, aerospace, pharmaceuticals, medical equipment, and advanced materials. China has established a 27 billion USD semiconductor investment fund to enhance the self-sufficiency of its semiconductor industry. The US and Europe are prepared to allocate tens of billions of dollars to support investors in the semiconductor sector.

The increasing pressure asks Vietnam to ready its human resources, infrastructure, and other key elements while implementing globally competitive investment support policies to both retain current investors and entice more industry leaders./.

Vietnam’s wood processing sector sees rosy signs in first months

Vietnam's wood industry has showed signs of recovery in the first months of 2024, and this positive trend continues, bolstered by an increase in orders from traditional markets and progress towards achieving export targets set for the year.

According to Vietnam Customs, the country's wood export revenue reached about 8.7 billion USD in the seven months of this year, marking a 21% increase compared to the same period in 2023. Specifically, the export of wood products fetched about 5.96 billion USD, up more than 22%.

Experts attributed this growth to rising demand in major markets, particularly the US, which remains Vietnam's largest importer of wood and wood products. The Ministry of Industry and Trade (MoIT) reported that the US accounts for nearly 54% of Vietnam's total wood and wood product exports. Exports to the US have been steadily increasing month by month, reflecting a positive trend.

Ngo Sy Hoai, Secretary-General of the Vietnam Timber and Forest Products Association, noted that wooden furniture imported from Vietnam represents about 41% of the total US imports of such products.

Recent developments, including the US Department of Commerce's decision to terminate its investigation into anti-dumping and countervailing duties on wooden cabinets from Vietnam, are expected to facilitate Vietnamese wood product's greater access to the US market, he noted.

In addition to traditional markets like the US and China, Vietnamese wood exporters have also reported growth in new markets such as India and the Middle East.

In the first half of 2024, shipments to China reached 1.05 billion USD, climbing 49.3% year-on-year, while those to Canada and India hit 113,000 USD and 73,000 USD, up 23.9% and 94.2% respectively.

Nguyen Liem, Chairman of the Binh Duong Furniture Association (BIFA), emphasised the need for the wood industry to adapt to changing conditions, including adopting flexible production and export strategies. This includes employing advanced technology and optimising the supply chain from raw materials to logistics.

Although the wood industry has seen a rise in export value in recent years, the added value of its products remains relatively low. Experts estimate that only about 5% of Vietnam’s wood products have designs - a crucial stage for increasing added value and affirming product brands.

Phung Quoc Man, Vice President of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), suggested that Vietnamese wood enterprises need to invest in design and innovation to enhance product value and profitability.

To further increase the value of exported wood products, Vietnamese companies should invest in technology and digital transformation to reduce exports of raw wood materials and prioritise the production of refined products that meet market demands./.

Vietnam's green logistics industry becomes attracttive to investors: Insiders

Vietnam's logistics industry is witnessing significant changes and has become an attractive destination for businesses and investors, insiders said at a series of seminars held within the on-going Vietnam International Logistics Exhibition (VILOG) 2024 in Ho Chi Minh City.

Vietnam becomes an important production and trade hub in the world, along with a boom of e-commerce and rapid growth of global supply chains.

Deputy Minister of Industry and Trade Phan Thi Thang said the industry plays a crucial role in helping Vietnam's economy overcome difficulties during the COVID-19 pandemic, as well as current global geopolitical fluctuations.

It has contributed to the continuous growth of Vietnam's total import- export turnover, surpassing 600 billion USD in 2021, 700 billion USD in 2022, and reaching 683 billion USD in 2023. The figure hit over 369.6 billion USD in the first six months of 2024, up 16% year-on-year. The national strategy on green growth for the 2021-2030 period with a vision to 2050 has set a target of "greening" economic sectors, boosting the restructuring of the economy in close association with the reform of the growth model. To realise the strategy, the Prime Minister has issued a national action plan on green growth in the 2021-230, in which logistic services are one of the 18 key themes. A logistics business has pointed out that a key factor in accelerating the industry’s growth is technology and collaboration within the symbiotic ecosystem.

According to the World Bank's report, Vietnam's Logistics Performance Index (LPI) reached 3.3 points in 2023, up from 3.27 points in 2018, ranking the country 43 out of the 154 countries worldwide and fifth among ASEAN countries. This is the highest score Vietnam has achieved since the inception of this study.

Vietnam is also among the top 10 emerging logistics markets, ranking 4th in terms of international logistics opportunities, and is considered one of the leading potential growth countries in Southeast Asia. Its growth target of 6.0% for 2024 has boosted confidence among logistics companies.

Particularly, the Government's strong push for public investment, especially in transport infrastructure such as the North-South Expressway, Long Thanh Airport, and high-speed rails also creats positive signs for the potential development of infrastructure serving the logistics industry.

According to Vietnam Report's research findings combined with the synthesis of experts' opinions, domestic maritime transport will go hand in hand with the development of the road network, and this is one of the trends shaping the logistics market in 2024 and next years.

Experts said that a key prerequisite for developing domestic maritime transport is connecting seaports with inland port systems, highways, and railways.

In the short term, logistics firms expect to simplify operational processes to reduce costs; train and improve the quality of human resources; expand the supply chain and explore new markets; strengthen after-sales activities to build customer loyalty; and increase investment in technology equipment to support digital transformation.

Dao Trong Khoa, Chairman of the Vietnam Logistics Business Association (VLA), said green logistics is not just a trend but has become a mandatory requirement and an important criterion for the logistics community to expand international markets and join global supply chains.

Issues related to digital transformation in customs, sustainable air logistics, and training green skill for the workforce will be crucial factors contributing to the green and sustainable development of Vietnam's logistics industry, Khoa stressed.

Vietnam's logistics service companies need to ensure an increase in both quantity and quality, especially in meeting requirements to participate in global supply chains, he went on./.

Corporate bond issuances more than double in seven months

Companies issued 161.5 trillion VND (6.43 billion USD) worth of bonds during January-July, or 2.6 folds higher than the same time last year, the Ministry of Finance (MoF) said on August 5.

Credit institutions accounted for 67.5% of the value, property enterprises some 24%, and businesses of other industries 8.5%.

As much as 24 trillion VND worth of covered bonds was issued during the span, with those by realty firms making up of 84.4%.

Some 88.8 trillion VND worth of bonds was redeemed in the period, a 36% fall from a year earlier.

According to the Hanoi Stock Exchange, the total transactions in the secondary market amounted to more than 566.85 trillion VND, with each valued at around 4 trillion VND.

Earlier, a representative from VNDirect securities company forecast that bond maturity pressure will cool down in Q3 before heating up in the next quarter. The total value of bonds maturing in Q3 is expected at some 38.5 trillion VND, falling 27.2% quarter-on-quarter. The property sector was said to account for the largest share of 49%, followed by the banking sector with 26.7%.

The MoF said it will continue combining macro-economic policies with credit growth and property recovery ones to ensure transparency in the corporate bond market, thus making it develop in a safer, healthier and more sustainable manner./.

Fisheries export in July highest since early 2024

Vietnam’s fisheries export revenue in July grew 14% year-on-year to over 885 million USD, the highest recorded since the beginning of the year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The export during January – July was worth 5.28 billion USD, up 7% against the same period last year. Of the total, the shipment of shrimp rose 7% to nearly 2 billion USD, tra fish 7.7% to nearly 1.09 billion USD, and tuna 21% to 555 million USD.

Shipment to four major buyers recovered in July, with that to China increasing 30%, the US 14%, the EU 14% and Japan 11%.

During the seven-month span, export to the US and China expanded 10% to more than 930 million USD, that to the EU escalated 10% to over 600 million USD while that to the Republic of Korea inched up 1% to 426 million USD.

The US and the EU are expected to be promising markets for frozen products in the second half on the positive signs of economic recovery, easing inflation and cooling interest rates. In the meantime, there will be no breakthrough in the export of the goods to the Chinese market where demand for fresh products is high to serve catering service and tourism./.

Vietnam manufacturing sustains strong growth in July

The strong growth in the Vietnamese manufacturing sector seen in June was sustained in July.

A further substantial rise in new orders led manufacturers to ramp up production, with the rate of growth quickening to a near-record high.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) was unchanged at 54.7 in July, signalling a further marked strengthening of business conditions in the Vietnamese manufacturing sector.

Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “The fact that the Vietnamese manufacturing sector was able to sustain the strong expansion seen in June through into July adds to optimism that we are at the start of a good spell of growth that will help drive the wider economy forward.

"The main issue for firms at present is keeping up with demand. While production was ramped up, firms were still forced to dip into warehouse stocks to help meet new order requirements, resulting in one of the sharpest depletions of inventories on record.

"Manufacturers will need to expand workforce numbers more quickly and continue to secure additional materials should current trends in new orders be sustained in the months ahead."

In fact, the last time that growth was faster was in November 2018. Marked improvements were seen across the consumer, intermediate and investment goods categories.

New orders increased for the fourth month running in July, with the rate of expansion only slightly slower than the near record posted in June.

Where new business rose, panellists linked this to stronger market demand and an increase in customer numbers. New export orders also rose, albeit at a much softer pace than total new business. Some firms reported that export demand had been hampered by high shipping costs.

With new orders rising sharply, manufacturers ramped up production in July. Moreover, the rate of expansion in output quickened from that seen in June and was the second-fastest on record, just behind that seen in the opening month of data collection in March 2011.

Despite the sharp increase in output, firms needed to dip into existing stockpiles to help meet new order requirements. In fact, stocks of finished goods were depleted to the second largest degree on record, behind only that seen in February 2014.

Firms made efforts to expand capacity by increasing both their purchasing activity and employment at the start of the third quarter. Input buying rose markedly and at the fastest pace since May 2022. Staffing levels, on the other hand, increased only modestly and at a softer pace than in June. Meanwhile, backlogs of work accumulated for the second consecutive month.

Manufacturers were helped in their desire to secure materials by a second successive monthly shortening of suppliers' delivery times, although the degree of improvement in vendor performance was only marginal amid some reports of delays to sea transportation.

Stocks of purchases decreased for the eleventh month running and at a solid pace that was the sharpest since April. Input costs continued to increase sharply during July, with the pace of inflation only marginally weaker than the two-year high seen in June. Suppliers had reportedly raised their charges, while increased shipping costs were also a factor.

Rising costs for raw materials and shipping meant that manufacturers increased their own selling prices for the third month running in July. The rate of inflation was solid, albeit softer than that seen in the previous survey period.

Expectations that new orders will continue to rise over the coming year supported confidence in the outlook for production. Around 40 per cent of respondents expressed optimism, but sentiment eased to the lowest since January and was weaker than the series average./.

Source: VNA/SGT/VNS/VOV/SGGP/VGP