Domestic consumption drives industrial production growth in HCM City

Domestic consumption drives industrial production growth in HCM City

HCM City’s Index of Industrial Production (IIP) rose by 8.2 per cent in the first five months of 2025 compared to the same period last year, marking the highest five-month growth rate in the past seven years, according to the municipal Department of Industry and Trade.

HCM City’s industrial production in the first five months of 2025 reached its highest growth in seven years. — Photo courtesy of chinhphu.vn

HCM City’s Index of Industrial Production (IIP) rose by 8.2 per cent in the first five months of 2025 compared to the same period last year, marking the highest five-month growth rate in the past seven years, according to the municipal Department of Industry and Trade.

In May alone, the IIP increased by 5.1 per cent over the previous month and 9.4 per cent year-on-year.

Bùi Tá Hoàng Vũ, director of the department, said that in the early months of 2025, rising domestic consumption supported growth in the food production and consumer goods sectors. Meanwhile, the US’s temporary 90-day suspension of reciprocal tariffs helped boost export orders in key sectors such as textiles and garments, footwear, electronics, and processing and manufacturing, contributing to the city’s industrial growth.

Notably, the processing and manufacturing sector grew by 8.4 per cent during the period, continuing to serve as the main driver of industrial expansion. The water supply and waste treatment sector increased by 2 per cent, while the electricity production and distribution sector remained stable with a 0.7 per cent rise, ensuring no power shortages occurred.

Many industrial enterprises have also adopted rooftop solar power systems to reduce operational costs, leverage renewable energy, and meet green standards required by international partners.

The city’s four key industrial sectors rose by 8.2 per cent, matching the overall industrial production growth rate. Within this group, electronics manufacturing led with a 20.5 per cent increase, followed by pharmaceuticals and chemicals (12.6 per cent), mechanical engineering (5 per cent), and food and food processing (1.1 per cent).

According to the city Statistics Office, 23 out of 29 level-two industrial sectors recorded year-on-year increases in their industrial production index during the first five months of 2025.

Several sectors posted particularly strong growth, including printing and reproduction of recorded media (up 58.1 per cent), furniture manufacturing (up 38.2 per cent), production of electrical equipment (up 36 per cent), and the manufacturing of rubber and plastic products (up 24.2 per cent).

In terms of employment, the labour index at industrial enterprises in May 2025 rose by just 0.6 per cent from the previous month and by 2.6 per cent year-on-year. Cumulatively, the index increased by 2.2 per cent over the five-month period.

The Statistics Office noted a structural shift in the city’s workforce from low-skilled jobs to positions requiring higher-level skills. This trend is particularly evident in foreign direct investment enterprises, where an increase in the adoption of technology and automation has resulted in relatively modest labour growth despite increased production. 

Bizhub