Industrial production results in the first quarter of 2023 can be said to be the "gloomiest" in more than 10 years, when most of the important indicators of key industries declined, especially in the processing and manufacturing industry which has long been the engine of economic growth. The main reason pointed out is that the world economy continues to face many difficulties; In the domestic market, production orders decreased, export turnover decreased…
According to the latest data released by the General Statistics Office, the added value of the whole industry in the first quarter of 2023 decreased by 0.82% over the same period last year. To be specific, the processing and manufacturing industry decreased by 0.37%, reducing 0.1 percentage point to the overall growth rate of the whole economy; electricity production and distribution decreased by 0.32%, reducing by 0.01 percentage points; mining industry decreased by 5.6%, decreased by 0.2 percentage points...
MULTIPLE KEY PRODUCTS DECREASED
Regarding the Index of Industrial Production (IIP), data reported by the General Statistics Office showed that in the first quarter of 2023, IIP decreased by 2.2% compared to the same period last year (in January, it decreased by 11.1%; in February it increased by 2.2%). 7.2%; March decreased by 1.6%), much lower than the increase of 6.8% in the same period in 2022.
To be specific, the mining industry decreased by 4.4% (in the same period in 2022, it increased by 2.8%), reducing 0.7 percentage points in the overall increase; the processing and manufacturing sector decreased by 2.4% (in the same period in 2022, it increased by 7.3%), a decrease of 1.6 percentage points; the electricity production and distribution industry decreased by 1% (in the same period in 2022, it increased by 8%), reducing 0.1 percentage points; water supply industry alone, waste and wastewater management and treatment activities increased by 7.8% (in the same period in 2022, it increased by 1.4%), contributing 0.1 percentage points.
The report also noted that many key industrial products decreased in the first quarter of 2023. Specifically, cars decreased by 17.8%; steel bar, quadrate steel down 15.8%; motorbikes down 13.8%; phone components down 13.4%; textiles from natural fibers and mobile phones together decreased by 13.1%; casual wear down 10.2%; cement decreased by 9.9%; urea fertilizer decreased by 6.3%; Gaseous natural gas decreased by 6.1%. The decline in production of these staples impacted the IIP and value-added of the entire industry in the first quarter of the year.
More concerning, not only did production decline, but the consumption index of the whole industry also decreased. In the first quarter of 2023, the consumption index of the entire processing and manufacturing industry decreased by 2.9% over the same period in 2022 (in the same period in 2022, it increased by 6.6%). This leads to an increase in inventories of the entire processing and manufacturing industry as of March 31, 2023, up 4.4% over the same period last month and 19.8% over the same period last year (same period last year). at the time of the previous year increased by 17.7%). This shows that the production and business efficiency of enterprises has been significantly affected.
Industrial production in the first quarter of 2023 faced many difficulties due to reduced production orders, and exports decreased
According to the survey results on business trends of enterprises in the processing and manufacturing industry in the first quarter of 2023 compared to the fourth quarter of 2022, up to 38.5% of enterprises assessed difficulties: 39.4% number of enterprises decreased in production volume; 39.7% of enterprises have reduced orders; 40.1% of enterprises with new export orders decreased.
As for the situation of industrial production in localities across the country in the first quarter of 2023 compared to the same period last year, the report clearly shows that there was an increase in 48 localities and a decrease in 15 localities. Some localities with IIP index achieved a high increase due to the increase in processing and manufacturing industry, specifically: Cao Bang increased by 26.8%; Tuyen Quang increased by 22.6%; Hai Phong increased by 14.8%; Quang Ninh increased by 13.6%; Hai Duong increased by 12.5%; Nam Dinh increased by 12.3%; Dak Lak, Bac Lieu, and Phu Yen together increased by 11.6%; Bac Giang and Kien Giang increased by 10.9%. The localities with high production index of the electricity production and distribution industry are Hau Giang with an increase of 286.1%; Thai Binh increased by 55.7%; Quang Tri increased by 37%; Ca Mau increased by 33.7%.
In the opposite direction, some localities have low or low IIP index increase due to the decrease in processing and manufacturing industry, including Quang Nam down 34.3%; Bac Ninh decreased by 18.8%; Vinh Long down 16.5%; Soc Trang decreased by 15.6%; Vinh Phuc down 8.1%. The localities where the production index of the electricity production and distribution industry decreased were Ninh Binh down 31.8%; Tra Vinh decreased by 29.3%; Ha Giang down 24.9%; Cao Bang decreased by 21.9%; Hai Phong down 18.5%. Localities with production index of the mining industry decreased, including Soc Trang down 87%; Dong Thap down 50.6%; Vinh Phuc down 48.7%.
“DOUBLE” IMPACTS FROM INTERNAL AND EXTERNAL FACTORS
Explaining the cause of industrial production deceleration in the first quarter of 2023, the General Statistics Office said that this problem comes from external factors such as the world fuel price being pushed up, high inflation still existing around the world, and the risk of input supply chain disruption. The world economy showing signs of recession has affected Vietnamese manufacturers as both the number of new orders and exports have decreased. These factors make import demand from Vietnam drop sharply, production and business of enterprises are narrowed.
Meanwhile, input costs increased, interest rates increased, and revenue decreased, causing businesses to reduce the scale of operations. The growth drivers are all declining: exports decline, demand declines, private investment declines, disbursement of public investment is slow... The government prioritizes fighting inflation, tightening monetary policy, loan interest increased. Although businesses have tried to diversify and expand export markets, it is still difficult in general when the world economy declines.