Industrial production surges 10.8%, highest growth since 2019

Vietnam’s Index of Industrial Production (IIP) surged by an estimated 11.2% year-on-year in the second quarter of 2026, according to data released by the National Statistics Office on July 3.

This quarterly performance was anchored by an 11.3% rise in manufacturing and processing, a 12.4% increase in electricity production and distribution, and growth of 10.3% in water supply and waste management, while the mining sector expanded by 7%.

Cumulatively for the first six months of 2026, the IIP is estimated to have increased by 10.8% over the same period last year, significantly outpacing the 8.7% growth recorded in the first half of 2025 and marking the highest growth rate since 2019.

Within this overall figure, the manufacturing and processing sector rose by 11.4%, contributing 8.9 percentage points to the general index, while electricity production and distribution climbed 9.6%, contributing 0.9 points. The water supply and waste management sector grew by 8.9%, and the mining industry saw a significant recovery with 5.8% growth compared to a 3.5% decline in the previous year.

The National Statistics Office report further indicated that several key Level II industries saw substantial production increases, most notably metal production, which soared by 21.5%, followed by motor vehicles at 17.7% and beverages at 15.4%. Other sectors recording strong momentum included transport equipment, non-metallic minerals, and chemical products, which all saw gains between 14% and 15%. Meanwhile, the electronics, computers, and optical products sector, a critical pillar of the economy, grew by 10.9%.

However, some sectors faced headwinds, with leather products increasing by a modest 4.0% and hard coal and lignite mining contracting by 5.7%.

On a product level, the first half of 2026 saw a sharp rise in the output of motorcycles and automobiles, which jumped 32.9% and 26.9% respectively. Other major industrial products showing robust growth included rolled steel at 23.3%, processed seafood at 21.6%, and crude oil at 13.1%.

Conversely, production declines were noted for NPK compound fertilizer, which dropped 8.3%, as well as monosodium glutamate, clean coal, and leather footwear, all of which saw decreases of approximately 5.7% to 8.2% compared to the same period last year.