Manufacturing business sentiment in Vietnam to rise in Q3
However high loan interest rates remain a challenge.
Vietnamese manufacturing business sentiment is poised to rise in the third quarter given the country's unexpectedly higher economic growth in the second quarter and optimistic outlook for the year.
The General Statistics Office (GSO) survey revealed that 82.9% of businesses in the manufacturing, processing, and construction industries expect improved or stable conditions in Q3 compared to Q2, whilst 17.1% anticipate greater difficulties.
This suggests an improvement from the previous survey which revealed that 77.6% of businesses forecast more favourable or stable production and business activities and 27.1% predict greater difficulties.
Optimism however differs across various types of enterprises.
State-owned enterprises topped with 43% expecting better conditions, followed by foreign direct investment enterprises at 42.6%.
Only 39.6% of private domestic enterprises predict an improvement. On the other hand, 17.3% of domestic firms expect tougher times compared to 16.4% of state-owned and 16.8% of FDI enterprises.
As a result, 28.9% of businesses have called on the government to enforce more effective measures to trigger domestic demand and promote the "Vietnamese use Vietnamese goods campaign."
Also, 26.1% of businesses have demanded that the government and local authorities strengthen trade promotion efforts to explore new markets and partners, thus increasing product consumption both domestically and internationally.
The survey was conducted among 6,114 manufacturing and processing enterprises.
Low domestic market demand and high competition from domestic products presented two major challenges for the manufacturing and processing industry in Q2, with 53.4% and 50.4% of enterprises identifying these issues, respectively.
High loan interest rates also remain a challenge given that 22.3% of businesses struggling, up 3.9 percentage points from Q1 2024.
To lessen the pressure of rising input costs, 50.1% of businesses have urged the government to lower lending rates while 28.2% opined banks to simplify loan procedures and conditions.
Textile and footwear enterprises are confronted with uncommon challenges citing difficulties with export orders and skilled labour force.
As a result, 18.6% of businesses have called for improvements in logistics services; 23.4% have demanded reductions in land rental costs for production and business activities; and 22.4% have noted the need for a stable power supply.
There's also a concern for administrative procedures, with 31.5% of businesses calling for continued reforms to reduce waiting times and streamline administrative processes.
In Q2, Vietnam's economy grew by 6.93% and 6.42% growth in the first half of the year.
Nguyen Thi Mai Hanh, Director of the GSO's National Accounts Department, said achieving the yearly growth target of 6.5% will require unwavering dedication, harmonised fiscal and monetary policies, as well as measures to boost investment and consumption. Innovation in growth drivers will also be necessary for breakthroughs in the second half of the year.
