Vietnam Manufacturing Tracker: Update to July 2025

The manufacturing sector is the cornerstone of Vietnam’s economic growth and resilience. The government has undertaken several initiatives to leverage the country’s inherent strengths, resulting in tangible outcomes supported by compelling data. The Vietnam Manufacturing Tracker by Vietnam Briefing offers the latest data, insights, and policy updates to keep foreign investors and analysts informed about the industry.

Update on August 12, 2025: Despite concerns over changes in US tariff policies, Vietnam reported upbeat results in some of its key economic and manufacturing indicators in the first seven months of 2025, including increases in foreign direct investments (FDI), Manufacturing Purchasing Managers’ Index  (PMI), and Industrial Production Index. The US also remained the leading market for Vietnam’s exports with a robust revenue of US$85.1 billion over the same period.

Over the past few decades, Vietnam has effectively leveraged its key advantages to become a major player in global supply chains, with its role gaining even more prominence amid the “China Plus One” production relocation strategy.

FIND BUSINESS SUPPORT

Grow Your Presence in Asia with Complete Market Entry and Cross-Regional Support

This growing importance is primarily driven by Vietnam’s labor-intensive manufacturing sector, characterized by relatively low labor costs, well-developed export infrastructure, and a strategic location on major trade routes.

The Vietnamese government has been proactive at both national and provincial levels, implementing measures such as national schemes, generous corporate income tax breaks for high-tech companies, and the development of specialized industrial zones.

Vietnam’s economic growth outlook

According to Vietnam’s General Statistics Office (GSO), the country’s Gross Domestic Product (GDP) grew exponentially by 7.52 percent in the first half of 2025, marking the highest growth for the period since 2011 and the highest GDP expansion in Southeast Asia for the first half of 2025. 

Compared to the sluggish growth in the first three months, Vietnam’s upbeat figure for the year’s first half has led the United Overseas Bank (UOB) to revise its forecast for the country. Accordingly, the UOB has raised Vietnam’s GDP growth projection to 6.9 percent for 2025 from its previous estimate of 6 percent. Vietnam’s real GDP increased by a strong 7.96 percent year-over-year in Q2 2025, surpassing Bloomberg’s projected growth of 6.85 percent.

On May 5, 2025, Vietnam’s Prime Minister Pham Minh Chinh announced that the country’s GDP growth rate is targeted to reach 8 percent or more this year, higher than the 7.09 percent rate in 2024. The country also aims to achieve a GDP per capita of US$5,000 this year and grow its national economy to over US$500 billion in size.

To achieve this goal, Vietnam will need to maintain its stable performance throughout the rest of this year, amid rapidly changing trade dynamics, mostly driven by US tariff pressures, which are expected to influence the global supply chain realignment.

For further information, see: Vietnam’s Economic Outlook for 2025: Push for Digitalization and Sustainability

GDP and the value added by the manufacturing sector

The GSO reported that the industrial sector’s value-added contribution to GDP in H1 2025 increased by 8.07 percent year-over-year, contributing 2.64 percentage points to the economy’s overall growth rate.

Breaking this industrial contribution down:

• Processing and manufacturing increased by 10.11 percent, contributing 2.55 percentage points;
• Water supply, management, and treatment of waste and wastewater increased by 7.3 percent, contributing 0.04 percentage points;
• Electricity production and distribution increased by 4.2 percent, contributing 0.17 percentage points; and
• Mining activity decreased by 4.25 percent, resulting in a 0.63 percentage point decrease in the overall growth rate.

For further information, see: Vietnam’s Economy in H1 2025: Inflation, Trade, FDI, and Business Trends

Vietnam Manufacturing Purchasing Managers’ Index (PMI)

The S&P Global Manufacturing PMI reflects the manufacturing sector’s performance by surveying 400 firms in the industry. The PMI is built on five weighted sub-indexes:

• New orders (30 percent)
• Output (25 percent)
• Employment (20 percent)
• Suppliers’ delivery times (15 percent)
• Stock of items purchased (10 percent)

A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month, below 50 represents a contraction, while 50 indicates no change.

Vietnam’s monthly manufacturing PMI data – 2024-25

Interpreting the PMI scores

Vietnam’s manufacturing sector bounced back following months of sluggish performance, posting 52.4 in July PMI. This is the first time Vietnam’s PMI score has exceeded the 50 mark after three months, thanks to a rise in new orders, boosting a faster recovery in production despite further export weakness as a result of tariffs.

FIND BUSINESS SUPPORT

How Dezan Shira and Associates can help companies succeed within the manufacturing sector

Simultaneously, S&P Global emphasized that the key finding of its latest survey is that Vietnam faces the challenge of sourcing raw materials. Companies associated this with extensive supplier delivery delays, decreasing purchase stocks, and rising building costs. If material supply problems persist in the coming months, the sector’s growth rates could be restricted.

That said, July PMI data overall indicated that the Vietnamese manufacturing sector is recovering after the disruption caused by the US tariff announcements in recent months.

Highlights from Vietnam’s PMI in July 2025:

• Output growth quickens as new orders expand;
• New export business continues to fall amid US tariffs; and
• Cost inflation quickens to seven-month high.

Index of Industrial Production (IIP)

The IIP is an indicator that evaluates the growth rate of industrial production monthly, quarterly, or yearly. It reflects industrial production growth in general and the growth rate of each commodity in particular.

The IIP is calculated as a percentage of the industrial production generated in the current and base periods.

Vietnam’s IIP data – 2024-25

Interpreting the IIP scores

In the first seven months of 2025, Vietnam’s IIP increased by 8.6 percent compared to the same period last year. Sector-specific performance of Vietnam’s IIP in H1 2025 is as follows:

• Manufacturing and processing industry increased by 10.3 percent, contributing 8.5 percentage points to the overall increase;
• Electricity, gas, steam, and air conditioning supply rose by 4.6 percent, contributing 0.4 percentage points;
• Water supply, sewage, waste management, and remediation grew by 10.4 percent, contributing 0.1 percentage points; and
• Mining and quarrying decreased by 2.7 percent, reducing the overall score by 0.4 percentage points.

Employment in manufacturing

FIND BUSINESS SUPPORT

Build Your Asia Team with Expert Support in Recruitment, PEO and Global Staffing

Affordable labor costs are a key advantage for Vietnam in attracting foreign manufacturers. Given the manufacturing sector’s critical role in the economy, its employment impact is also substantial. By 2023, the manufacturing sector employed the second-largest workforce in Vietnam, second only to agriculture.

According to the GSO, Vietnam’s manufacturing and construction sector employed 17.4 million people in 2024, accounting for 33.4 percent of the total employment. This represents an increase of 167,000 workers compared to 2023.

Key data on Vietnam’s average monthly income in H1 2025 include:

• The average monthly income stood at VND 3 million(US$325), a 10.1 percent year-on-year increase;
• Salaried employees earned VND3 million (US$364) on average;
• The average monthly income of urban employees was VND 4 million (US$407), compared to the figure of VND 8.4 million(US$329) of their rural counterparts.

Also read: Vietnam Wages in 2025: Overview, Trends and Implications for Investors

Note: (*) Data from 2021-2023 was calculated following the ICLS19 standard. Under ICLS19, people working to produce self-sufficient products in the agriculture, forestry, and fishery sectors will not be identified as employed as per the ICLS13 standard.

Foreign direct investment in Vietnam’s processing and manufacturing industry

According to the Ministry of Finance (MoF), in the first seven months of 2025, total registered FDI surpassed US$24.09 billion, reflecting a 27 percent year-over-year increase. This includes:

FIND BUSINESS SUPPORT

Seamlessly Manage Your Operations Across Multiple Asian Markets

• US$10.03 billion in new investments with 2,250 new projects, which is a 15 percent increase year-on-year;
• US$9.99 billion in adjusted capital for 920 existing projects, almost doubling compared to previous figures; and
• US$4.07 billion through capital contributions and share purchases, a 61 percent rise.

The MoF also reported the total new and additionally registered capital by sector as follows:

• Processing and manufacturing attracted US$12.1 billion, making up around 61 percent of the total;
• Real estate attracted US$5 billion, making up 25 percent; and
• The remaining sectors attracted almost $3 billion, accounting for roughly 15 percent.

Concurrently, there were 1,982 cases of capital contributions and share purchases. Foreign investors contributed approximately US$1.6 billion to processing and manufacturing, representing just under 40 percent. Professional activities and science and technology attracted about US$827 million, or 20 percent. The remaining sectors accumulated around US$1.65 billion, making up 40 percent.

Vietnam’s merchandise exports

Overall, Vietnam recorded a trade surplus of US$9.7 billion in the first seven months of 2025, compared to US$12.6 billion in the same period last year. The country’s total export turnover reached US$262.44 billion, up 14.8 percent year-on-year. Of this:

• The domestic sector contributed US$67.48 billion, up 6.7 percent year-on-year and accounting for 25.7 percent of the total exports; and
• The foreign-invested sector remained the key driving force and contributed US$194.96 billion, up 17.9 percent and making up 74.3 percent of the total.

By export commodity structure in the first seven months of 2025, processed industrial goods continued to hold the largest share with US$232.37 billion, making up 88.6 percent.

FIND BUSINESS SUPPORT

Identify the Optimal Investment Destination with Cross Country Competitiveness Benchmarking ⟶

During the same period, the US remained Vietnam’s largest export market despite tariff uncertainties, with US$85.1 billion in export revenue. Vietnam experienced trade surpluses with the US (US$74.6 billion), EU (US$22.3 billion), and Japan (US$1.3 billion), while reporting trade deficits with China (US$66.5 billion), South Korea (US$17.4 billion), and ASEAN (US$8.5 billion).

In 2024, there were 37 items with export turnover of over US$1 billion, accounting for 94.3 percent of total export turnover (with 8 items exported at a turnover value of over US$10 billion, accounting for 69.0 percent). Electronics, computers, and components continue to be the leading export goods in terms of export value, dominated by Samsung, LG, Apple, and electronic components manufacturing companies in Vietnam.

For further information, see: Vietnam’s Trade Performance in 2024: How to Read the Data

Some highlights of Vietnam’s key export merchandise in 2024 are as follows:

• Electronics, computers, and components: Export value reached US$72.6 billion in 2024, an increase of 26.6 percent compared to 2023. This category accounted for 17.9 percent of the total export turnover.
• Phones and components: Ranked second with an export turnover of US$53.9 billion, representing a growth of 2.9 percent.
• Machinery, equipment, tools, and spare parts: Exports totaled US$52.3 billion, reflecting a 21 percent increase.
• Textiles: This category generated US$37 billion in exports, up by 11.2 percent.
• Footwear: Export value reached US$22.9 billion, marking an increase of 13 percent.
• Wood and wood products: Exports amounted to US$16.3 billion, showing a growth of 20.9 percent.
• Means of transport and spare parts: This sector reached US$15.1 billion in exports, up by 6.4 percent.

Incentives for investing in Vietnam

FIND BUSINESS SUPPORT

Have a question about tax liability in Vietnam? Contact our Tax Team

Vietnam’s Law on Investment specifies the three forms of incentives that are available to companies operating within the country:

• Corporate income tax (CIT) incentives, including various preferential tax rates and tax holiday rates;
• Import duty incentives; and
• Exemption or reduction of land rents and levies.

The CIT incentives can be granted to investments based on whether they belong to prioritized or government-encouraged sectors and/or are established in economic zones or disadvantaged locations, etc.

New incentives set to take effect

Vietnam has launched two new directives, Resolution 198 and 139, which detail special mechanisms and policies for the private sector, along with their implementation plans. These incentives aim to bolster businesses by addressing critical areas such as taxes, fees, land access, finance, credit, and administrative obstacles.

For a better understanding of these appealing policies, please read:  Vietnam Private Sector to Enjoy Special Policies: Resolutions 198 and 139

New tax regime with amended CIT Law

The National Assembly’s approval of Vietnam’s amended CIT Law on June 14, 2025, marks an important change in the country’s tax regime. While the headline tax rate remains unchanged, the underlying structure of how corporate incentives are granted has shifted, especially for manufacturing companies operating in industrial parks.

For further information, see: 2025 CIT Law: Implications to Manufacturing Companies in Industrial Parks

Industrial park classification in Vietnam

Industrial parks in Vietnam fall under three categories according to Decree No. 82/2018/ND-CP on the management of industrial parks and economic zones. These are as follows:

• Export processing zones: Industrial parks focused on manufacturing goods for export and providing services to support production for export. These zones must comply with the conditions, processes, and procedures outlined in the Decree.
• Auxiliary industrial areas: Industrial parks specializing in manufacturing auxiliary products and providing related services. Up to 60 percent of the rentable industrial land within these parks can be leased or re-leased for auxiliary industry projects.
• Eco-industrial parks: Industrial parks that emphasize cleaner production, efficient use of natural resources, and cooperation among enterprises to enhance economic, environmental, and social benefits through industrial symbiosis.

Vietnam’s national policy framework for manufacturing development

Recognizing the importance of the manufacturing sector and industrial development to the health of the overall economy, Vietnam’s government has implemented several national schemes to further promote these areas.

Strategy on exports and imports for 2011-2020, with a Vision to 2030

Former Prime Minister Nguyen Tan Dung approved the Strategy on Exports and Imports for 2011-2020, with a Vision to 2030 in his Decision 2471/QD-TTg dated December 28, 2011.

This framework outlines specific targets and implementation strategies for the manufacturing sector:

• Export orientation: Focus on developing high-tech and advanced products in the processing and manufacturing industries.
• Production and economic restructuring: Encourage and attract investment in supporting industries to meet domestic needs and integrate into the global supply chain, particularly in manufacturing mechanics, electronics, automobile components, textiles, footwear, and high technology.

Industrial Development Strategy Through 2025, with a Vision to 2035

The Industrial Development Strategy Through 2025, with a Vision Toward 2035, was approved under Decision No. 879/QD-TTg dated June 9, 2014. This strategy set specific development priorities for the following processing and manufacturing sub-sectors:

FIND BUSINESS SUPPORT

Seamlessly Manage Your Operations Across Multiple Asian Markets

• Mechanical engineering and metallurgy;
• Chemicals;
• Agricultural, forestry, and fishery product processing; and
• Garments, textile, leather, and footwear.

National Industrial Development Policy by 2030 with a Vision to 2045

Resolution No. 23/NQ-TW, dated March 22, 2018, outlines the National Industrial Development Policy for 2030 with a Vision to 2045. The specific targets to be achieved by 2030 include:

• Industry is expected to contribute over 40 percent of GDP, with the processing and manufacturing sector accounting for around 30 percent and manufacturing alone for over 20 percent.
• The proportion of high-tech products in the processing and manufacturing sector will reach at least 45 percent.
• The industrial added value growth rate will average over 8.5 percent, with the processing and manufacturing sector growing over 10 percent annually.
• Labor productivity in the industry will grow by 7.5 percent per year.
• The Competitive Industrial Performance (CIP) Index will rank among the top three ASEAN countries.
• The proportion of labor in the industrial and service sectors will exceed 70 percent.
• Development of large-scale, multinational, and globally competitive industrial clusters and enterprises.

Socio-Economic Development Plan for 2021-2025

The government’s action plan designated in Resolution No. 99/NQ-CP implements the Socio-Economic Development Plan for the five-year period from 2021 to 2025. The action plan states its specific objectives related to the manufacturing sector, which are:

• Average GDP growth rate in this 5-year period to reach about 6.5 – 7 percent;
• Proportion of processing and manufacturing industry in GDP to reach over 25 percent;
• Digital economy to account for about 20 percent of GDP; and
• Contribution of total factor productivity (TFP) to growth to be about 45

National Green Growth Strategy for 2021-2030, Vision Towards 2050

Aiming to empower the economy through a green growth transition, Vietnam’s government issued Decision No. 1658/QD-TTg approving the National Green Growth Strategy for 2021-2030 with a Vision Towards 2050. Key goals are:

• Reducing the level of energy consumption in manufacturing, transportation, commercial, and industrial activities
• Facilitating the conditions for the development of new green manufacturing industries; and
• Encouraging the application of green technologies along with manufacturing activity management and control systems.

This article was last updated August 13, 2025.

• Previous Article Chu Lai Open Economic Zone: Driving Regional Industrial and Investment Expansion
• Next Article Vietnam Launches Direct Land Cable to Singapore: A Push for Digital Economy