Production recovery, factory increases operating capacity
According to the Statistics Office, the industrial production index (IIP) as of December 2025 increased by 10.1% compared to the same period last year, of which the processing and manufacturing industry increased by 11.9%, continuing to be the main driving force of industrial growth. For the whole year 2025, IIP increased by 9.2%, the highest level in many years, reflecting a significant improvement in production activities after a difficult period.
Entering January 2026, industrial production continues to maintain positive growth momentum, showing that recovery is not only at the end of the year but is spreading to the beginning of the new year. In many industrial parks, output and orders have improved, businesses have gradually increased operating capacity, replacing the previous sluggish production state.
Along with the recovery of production, after a period of having to cut working hours and postpone work due to lack of orders, many factories have proactively arranged more production shifts to meet delivery schedules. Compared to the previous period of sluggishness, the production picture shows a clear reversal, although the level of recovery is still different between industries and localities.
Orders improve, business confidence gradually returns
Besides IIP data, the PMI index of Vietnam's manufacturing sector announced by S&P Global also reflects the recovery trend of the processing and manufacturing sector. PMI in December 2025 reached 53.0 points and January 2026 maintained at 52.5 points, continuing to be above the 50 point threshold - a threshold showing expanded production activities.
Component indices show that output and new orders have improved, in which export orders show signs of recovery. At the same time, jobs in the manufacturing sector have increased, reflecting improved labor demand along with the recovery momentum of production. Although input costs are still under pressure, PMI maintaining above the expansion threshold for many consecutive months shows that business confidence is being strengthened.
Not only recovering in scale, the processing and manufacturing industry is entering a phase of in-depth restructuring. In the context of increasingly fierce competition and increasing production costs, many businesses are promoting investment in automation, digital transformation, and upgrading lines to improve productivity and quality control.
Key industries such as electronics, precision mechanics, and deep processing continue to be prioritized for development, aiming to gradually reduce simple processing, increase technology content and added value in products. At the same time, the trend of green and sustainable production is increasingly clear as businesses must meet increasingly strict environmental, emission and traceability standards from the export market. This is not only a requirement to comply but also becomes a long-term competitive factor.
