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Industry remains sluggish, inventories high

Update: November, 30/2012 - 09:46

HA NOI (VNS)— Industrial production continued to see low growth this month with the nation's Index of Industrial Production (IIP) increasing just 4.8 per cent over October, according to the General Statistics Office (GSO). The index for the first 11 months has risen by just 4.6 per cent over the same period last year.

The rate of increase in the IIP this year has been much lower than in comparable periods in 2011 and 2010, said GSO expert Vu Quang Ha, noting that the IIP rose 6.9 per cent last year and 9 per cent in 2010.

The trend of low industrial growth was due to impacts of the global recession which has lowered domestic purchasing power as well as demand in major export markets, such as the US, EU and Japan.

In specific industries, electrical generation and distribution saw a growth of 12.4 per cent, and water supply and treatment grew by 8.1 per cent during the 11-month period, but manufacturing and processing industries – which account for over 70 per cent of all industrial production value – grew by only 3.9 per cent. The mining industry saw a similarly anaemic 4-per-cent growth.

For a number of leading export-driven sectors, it was even worse. The textile and garment industry saw growth of only 3.4 per cent, while the wood products grew by only 1.9 per cent. Some sectors even saw negative growth, including footwear (down 0.6 per cent), cement (down 6.2 per cent), paper (down 9 per cent) and machinery (down 14 per cent).

The low figures reflected the stagnation in many of these industries, which have seen many production facilities closed and many enterprises liquidated.

Among the few bright spots, the manufacturing of telecommunications devices saw rapid growth of 50.4 per cent in the first 11 months of the year, while electronics grew by 18.3 per cent, pharmaceuticals by 15.3 per cent and crude oil production by 11 per cent. The consumption index of products of manufacturing and processing industries during the first 11 months lagged behind the production index. October saw the consumption index at a 10-month low of only 3.3 per cent.

Due to weak consumption, inventories continued high, with no improvement since August. As of November 1, the inventory index was 20.9 per cent. Telecommunications devices, fertiliser, motorbikes, tobacco, cement, paper and fisheries were among those with high inventories. — VNS

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