By the end of the first quarter of 2014, the processing and manufacturing industry obtained relatively high growth, the Vietnam Economic News reported, adding that while the sector’s inventories decreased gradually the market for industrial products remained difficult.

The General Statistics Office (GSO)’s data showed that Vietnam’s Index of Industrial Production (IIP) grew 5.2 percent in the first quarter of this year, while the growth was five percent during the same period time last year. Of this, the processing and manufacturing industry grew 7.3 percent (compared to 5.3 percent growth in the first quarter of 2013), contributing 5.1 percentage points to the country’s IIP growth.

Sales saw positive signs. The sales index of processed and manufactured goods on March 1, 2014 was 4.3 percent higher than the same time last year. Some segments of the processing and manufacturing industry reached a sales index higher than the same time in 2013.

They included electrical equipment production that grew 29.8 percent, leather and related products (up 19.5 percent), motorized vehicles (up 16.6 percent); garments (up 13.5 percent), metal products (up 10.5 percent), chemicals and chemical products (up nine percent), paper and paper products (up 8.5 percent), and food processing (up eight percent).

Meanwhile, the sales index of beverage production rose only 5.9 percent, that of textile increased 4.8 percent, that of metal products fell nine percent, and that of electronic products, computers and optical products decreased 14.7 percent.

The inventory index of the whole processing and manufacturing industry on March 1, 2014 was 13.4 percent more than the same time in 2013. This growth was lower than that in previous years. Segment with a decreased inventory index growth included garment manufacturing (up 9.6 percent), electrical equipment production (up 5.1 percent); production of products from non-metallic minerals (up 3.3 percent), beverage production (up three percent), textiles (up 2.9 percent), and motorized vehicle production (down 28.7 percent).

Segments with an increased inventory index included metal production (up 126.8 percent), production of pharmaceuticals and pharmaceutical materials (up 61.4 percent), metal production, except machinery and equipment (up 59.4 percent), manufacture of chemicals and chemical products (up 54.2 percent) and production of leather and related products (up 53.6 percent).

On March 1, 2014, the processing and manufacturing industry’s inventory rate was 84.4 percent, while the rate of the medicine, pharmaceutical chemical and pharmaceutical material production industry was 181.5 percent, that of chemical production was 152.9 percent, that of furniture (bed, wardrobe, table and chair) production was 122.6 percent, and that of metal production was 122.4 percent.

The above-mentioned inventory rates showed that the market demand for the processing and manufacturing industry had not improved considerably. The price index of the industry’s products in the first quarter of 2014 rose only 0.89 percent, while the price of raw materials and inputs for production increased about 2.84 percent, and transport and warehousing charges increased about 2.56 percent compared to the same time last year. This has been causing a high pressure on the development of processing and manufacturing enterprises in 2014.

According to the newspaper, to improve the situation, apart from the macro solutions for sale promotion and demand stimulation, businesses need to take the initiative in development, be creative, improve product and service quality and competitiveness to increase sales, prepare all the necessary conditions to take advantage of opportunities to expand the market, especially when a series of trade agreements between Vietnam and international partners are signed in the near future.-VNA