Industry output jumps 14.2% in five months

Industrial production in the first five months of the year surged 14.2 per cent against the same period in 2010 to VND343.6 trillion (US$16.36 billion), the General Statistics Office (GSO) reported.

Of this total, it was the non-State sector which experienced the highest increase: 17.1 per cent. Foreign-invested firms followed with growth recorded at 16.9 per cent while State-owned firms saw a growth rate of only 5.2 per cent.

In May alone, industrial production was valued at VND74 trillion ($3.52 billion), up 3.9 per cent on the previous month.

Though the growth rate was similar to that in the last several months of 2010, industry insiders were concerned that inflation and high interest rates would cause industrial production to slow over the coming months.

New index measures industrial production

The General Statistics Office (GSO) is to launch a new method for calculating the industrial development index next month – the Index of Industrial Production (IIP).

The current method for measuring industrial growth has been in place since 1994 and uses figures from that year as the basis for its calculations. This index has, however, proven inaccurate, particularly considering the country’s shift to a globally integrated market economy.

The GSO said under the new system, the industrial development index would be lower than under the old one.

For example, according to the new system, industrial production results in May might have increased only 3.1 per cent over the previous month. Meanwhile, the new system might give the rise for the first five months against the same period last year as 9.2 per cent.

The GSO completed the new IIP after receiving nearly five years of technical assistance from the Japan International Co-operation Agency and Japan’s Ministry of Economy, Trade and Industry.

Minister of Industry and Trade Vu Huy Hoang warned that increasing fuel and materials prices, as well as high interest rates would hinder industrial production during the second quarter of this year.

“Local industries are already feeling the pinch and things will become harder during the next several months,” Hoang said, forecasting that global commodities prices would climb as a result of rising oil prices, which would have serious impacts on the local manufacturing and production sectors.

Hoang said to maintain a high growth, industrial producers needed to strengthen the application of measures aimed at controlling inflation and increase their use of domestically produced machinery and materials. This would minimise negative impacts resulting from the dependence on imports.

The entire sector needed to work hard to assure that industrial production in the coming months reached a growth rate not lower than that seen in the first few months of this year, he said. – VNS

Tags: Vietnam industrial output, Vietnam industries, Vietnam industry