Vietnam Manufacturing Tracker: As of April 2026

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.

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.

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.

Energy shock weighs on manufacturing momentum in Q1 2026

Vietnam’s manufacturing sector faced mounting pressure in Q1 2026 as the Middle East conflict disrupted global energy supply and drove up input costs. According to S&P Global, input cost inflation accelerated sharply in March, prompting firms to raise selling prices at the fastest pace in nearly 15 years.

While output and new orders remained in expansion territory, growth slowed notably from February, with some demand driven by frontloaded orders as buyers sought to get ahead of price increases. Rising fuel costs also fed into broader inflation, with March CPI reaching a five-year high, further weighing on operating conditions.

The sustained increase in energy prices is emerging as a key risk for Vietnam’s manufacturing outlook, with potential implications for cost competitiveness, demand, and investment decisions in the near term.

Vietnam’s economic growth outlook

As Vietnam achieved a notable 8.2 percent GDP growth in 2025, international institutions have projected a positive outlook for 2026, considering the country’s strong fundamentals and resilience amid global uncertainties:

• Standard Chartered predicts Vietnam’s GDP growth at around 7.2 per cent in 2026. GDP growth is projected at approximately 6.5 per cent in the first half and is expected to accelerate to around 8 per cent in the latter half, lifting full-year growth to 7.2 per cent.
• World Bank projects Vietnam’s GDP growth at 6.3 per cent in 2026 and 6.7 per cent in 2027 in its January 2026 edition of Global Economic Prospects. The growth projections for Vietnam are 0.2 and 0.3 percentage points above the forecasts in the June 2025 edition of the report.
• ASEAN+3 Macroeconomic Research Office (AMRO) forecasts Vietnam’s GDP growth will reach 7.6 percent in 2026, according to ít quarterly update released on January 21, 2026.

Meanwhile, Vietnam’s government has also set an ambitious target of a 10 percent increase in 2026.

GDP and the value added by the manufacturing sector

In 2025, Vietnam reached a historic milestone as its GDP officially surpassed the US$500 billion threshold, totaling VND 12,847.6 trillion (approximately US$514 billion), an increase of roughly US$38 billion compared to 2024.

The industrial sector continued to play a central role in this expansion. Industrial value added rose by an estimated 8.80 percent year-on-year, accounting for 35.15 percent of total growth in the economy’s aggregate value added.

Within the sector, manufacturing remained the primary growth engine. Value added in manufacturing increased by 9.97 percent, the highest rate recorded during the 2019–2025 period, accounting for 31.49 percent of the growth in industrial added value.

For further information, see: Vietnam Economic Performance in 2025: GDP, FDI, and Trade

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

Highlights from Vietnam’s PMI in March 2026:

• Sharp rise in input costs leads to fastest increase in charges since April 2011
• Rates of growth in output and new orders ease markedly
• Lead times lengthen to greatest extent in four years

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.

Employment in manufacturing

As of March 1, 2026, employment in Vietnam’s industrial enterprises rose modestly, increasing by 1.1 percent compared to the previous month and by 2.4 percent year-on-year.

By ownership structure:

• State-owned enterprises (SOEs): Employment increased by 0.2 percent month-on-month but declined by 0.2 percent year-on-year.
• Non-state enterprises: Employment rose by 1.1 percent from the previous month, while edging down 0.4 percent year-on-year.
• Foreign-invested enterprises (FIEs): Employment continued to expand, up 1.2 percent month-on-month and 3.4 percent year-on-year.

By industry:

• Mining: Employment remained unchanged month-on-month and increased by 1.2 percent year-on-year.
• Manufacturing and processing: Up 1.1 percent month-on-month and 2.4 percent year-on-year.
• Electricity, gas, steam, and air conditioning supply: Increased by 0.4 percent month-on-month and 3.3 percent year-on-year.
• Water supply, waste management, and wastewater treatment: Rose by 0.1 percent month-on-month and 2.6 percent year-on-year.

Note: (*) Data from 2021-2023 were 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

Vietnam’s merchandise exports

In the first quarter of 2026, Vietnam’s total export turnover reached US$122.93 billion, marking a strong increase of 19.1 percent compared to the same period last year.

By sector:

• Domestic sector: Export value totaled US$24.47 billion, down 16.6 percent year-on-year, accounting for 19.9 percent of total exports.
• Foreign-invested sector (including crude oil): Export value reached US$98.46 billion, up 33.3 percent year-on-year, representing a dominant 80.1 percent share.

In terms of export structure:

• 20 export items recorded turnover exceeding US$1 billion, collectively accounting for 86.8 percent of total exports.
• Five key items surpassed US$5 billion in export value, contributing 62.4 percent of the total.

Incentives for investing in Vietnam

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 to boost private sector growth

On January 15, 2026, the Vietnamese government issued Decree 20, which provides detailed regulations and implementation guidance for several provisions of Resolution 198 on special mechanisms and policies to promote private sector development.

These provisions collectively establish a framework of targeted incentives covering tax relief, access to land and business premises, support for innovation and digital transformation, and capacity-building measures for the private sector.

For a better understanding of these appealing policies, please read:

• Vietnam Private Sector to Enjoy Special Policies: Resolutions 198 and 139
• Driving Vietnam’s Private Sector Growth: Incentives under Decree 20/2026

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:

• 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 April 8, 2026