Manufacturing industry trends in Vietnam and forecast to accelerate
In recent years, manufacturing has always been considered a key key industry, bringing a lot of value to Vietnam’s economy. However, along with integrating into the global market, manufacturing enterprises in Vietnam are now facing competitive pressure from many leading companies and corporations in the world. This makes it necessary for businesses to continuously innovate and improve production activities to catch up with the general trends of the market. Therefore, in today’s article, let’s join RX Tradex to learn about manufacturing industry trends and forecasts to accelerate in Vietnam in 2023, thereby choosing a sustainable development direction in the future.
1. Overview of Vietnam’s manufacturing industry in 2023.
According to VnEconomy, in Q1/2023, the total export turnover of goods reached 79.17 billion USD, down 11.9% over the same period last year. In particular, most of the main manufacturing groups such as phones, electronic components, textiles, wood ,… all plummeted. In addition, the import turnover of goods in March 2023 will reach 28.92 billion USD, down 11.1% over the same period last year. According to the forecast of the Ministry of Industry and Trade, in the coming time, purchasing power will still recover slowly, manufacturing industries will still face difficulties due to the shortage of orders. [1]
According to the Journal of Economics and Forecasting, the index of manufacturing of the whole industry (IIP) in January 2023 will decrease by 8% compared to the same period last year. [2] Therefore, in order for the manufacturing industry in 2023 to continue to grow, the Government, ministries, branches and localities have been supporting businesses to overcome difficulties by many measures such as: Strengthening trade promotion, seeking and expanding markets, supporting taxes, export fees, etc stimulating domestic consumption,…
In addition, the level of competition in production also increased when Vietnam initially entered the global economic market. This causes businesses to directly compete with many developed countries, including China, Japan, the United States,… Therefore, in order to seek development opportunities, manufacturing companies need to continue to expand and diversify export markets, targeting potential regions such as India, Africa, the Middle East and Latin America, Eastern Europe,…
2. Positive signals of Vietnam’s manufacturing industry in 2023.
According to the survey results of 6,500 enterprises of the General Statistics Office in the end of 2022, manufacturing industries such as medicines, pharmaceutical chemicals, medicinal herbs ,… There was a 47.3% year-on-year increase in the rate of new orders. In addition, the motor vehicle manufacturing industry received a 30.2% increase in the number of new orders [3].
In general, many enterprises in the manufacturing industry are developing well at the present time thanks to the timely and flexible operating policy of the Government. In particular, the prices of gasoline, oil and construction materials are adjusted more stably, creating favorable conditions for production and business activities. In addition, after Vietnam signs free trade agreements (FTAs), the manufacturing industry is expected to open up a larger consumer market, bringing many advantages for businesses to develop.
According to the Investment Newspaper, four key manufacturing groups of Vietnam including: Mechanics, electronics – information technology, food processing, pharmaceutical chemistry – rubber also gradually recovered and developed stronger this year, specifically:
- Rubber industry: The output of finished products from rubber and plastic is gradually recovering. Many businesses have signed contracts with partners from the beginning of 2023, sharply increasing domestic distribution and export orders.
- Pharmaceutical chemistry industry: Most enterprises in the pharmaceutical chemical drug manufacturing industry have boosted production this year, the volume of products increased higher than the same period last year. Many experts forecast that the pharmaceutical chemical production industry will continue to increase strongly in the near future.
- Food processing industry: Domestic consumer demand continues to increase, promoting the strong recovery of the food and beverage industry. Since then, enterprises need to focus on expanding investment in factory lines to meet the huge consumer demand today.
- Mechanical industry: Mechanical production activities are tending to recover. Specifically, this development comes from the huge contribution of the vehicle manufacturing industry, with output in the first quarter of 2023 estimated to increase by 20.5%. [4]
3. It is forecast that manufacturing trends will accelerate in 2023.
3.1. Automation trends in production.
Automation has been widely applied in many different fields, especially industrial production. In Vietnam, self-driving robot line systems are gaining popularity in the manufacturing industry, partially or completely replacing jobs undertaken by humans. In particular, the pioneering and leading fields in applying this trend are: Mechanics, healthcare, agriculture, electricity, electronics, automobiles, ships,… Along with technology transfer from developed countries in the world, Vietnamese enterprises can promote automation into production lines, becoming a potential trend in the future.
3.2. Digital transformation trend in the manufacturing sector.
Digital transformation is an inevitable trend in the manufacturing sector today. In Vietnam, enterprises applying digital transformation in the production process take place with different roadmaps, depending on the industry or business field. In general, Vietnamese enterprises are applying popular technologies such as Cloud Computing, Big Data, Internet of Things (IoT) ,…
The application of this trend in production activities helps businesses towards the goal of optimizing the management apparatus, improving product quality and meeting market criteria. According to many experts, this production trend will be a launching pad for businesses to build sustainable development strategies in the future.
3.3. Customer-centric production trends.
The trend of customer-centric production is the focus on products that match the needs in the market, bringing the best quality when reaching consumers. This is a trend often applied by businesses with stages such as: Understanding customer needs, customizing products, creating flexible production processes,… From there, businesses can continuously improve products and create positive experiences for customers.
In fact, customer-centricity is a manufacturing trend that focuses on customer satisfaction with an enterprise’s products. This is forecasted to be an essential trend, which needs to be focused by Vietnamese enterprises not only in the field of production but also for business activities, especially in today’s increasingly fiercely competitive market.
3.4. The trend of cost-saving production.
Production costs are one of the biggest factors determining product costs, and directly affect the revenue and profit of businesses. Especially in the current fierce economic period, businesses need to look for cost-saving options, ensuring competitive advantages in price. In Vietnam, this trend often includes activities such as: Optimizing production processes, recycling, reusing, managing factory investment costs,…
The trend of cost-saving production helps businesses optimize resources in business operations, manage and improve the supply chain. In the future, this is considered a key production trend, especially suitable for small and medium enterprises in Vietnam (accounting for a large proportion) because they need to ensure capital to maintain operations or develop.
4. Summing up.
Above is an article about manufacturing industry trends in Vietnam that are forecasted to accelerate in 2023. Hopefully, through this article, businesses can find ways to improve production processes, catch up with the general trend in the global economic market. In addition, businesses who are interested in the latest technologies and industry trends can immediately participate in the exhibitions organized by RX Tradex Vietnam in 2023: NEPCON Vietnam, METALEX Vietnam, Vietnam Manufacturing Expo and Waste and Recycling Vietnam .
Comment:
[1]: Exports of key commodity groups declined sharply
[2]: Industrial production index January 2023
[3]: Report on the socio-economic situation in the fourth quarter and 2022
