Vietnam factory output up in February despite drop in smartphone production

VIETNAM’S industrial output and exports rose in February from a year earlier, partly helped by higher footwear sales, in a possible sign of recovering global demand for goods produced in the South-east Asian industrial powerhouse.

But indicating the caution among factory managers amid an uncertain global outlook, production of smartphones and cellphone parts, of which Vietnam is one of the world’s biggest producers, fell despite a rise in exports.

The country’s statistics agency said on Tuesday (Feb 28) that Vietnam’s exports rose 11 per cent in February from a year earlier and industrial output increased 3.6 per cent in the same month.

The rise in output in February follows an 8 per cent year-on-year drop in production in January when activity typically slows for the week-long celebrations for the Chinese New Year.

In the first two months of the year, industrial production was down 6.3 per cent compared to the same period last year.

Smartphone output in the country which is home to major Samsung factories was down nearly 10 per cent on the year and the output of cellphone parts fell by nearly 15 per cent.

Smartphone exports, however, were up 14,7 per cent, in a possible sign that companies reduced their inventory in February.

Footwear production rose by nearly 19 per cent in February of the year and exports climbed 4.1 per cent, after a big fall in January. In the first two months of the year, shoe exports were still down by 16 per cent compared to the same period last year.

Taiwan’s Pou Chen, the world’s largest maker of branded sports footwear and a top supplier to Nike and Adidas, plans to cut around 6,000 jobs in Vietnam due to weak demand, two local officials familiar with the company’s plans said earlier in February.

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In total, Vietnam’s exports rose sharply in February to US$25.88 billion, after a 21.3 per cent fall in January.

With imports dropping in February by 6.7 per cent, the country recorded a trade surplus of US$2.3 billion in the month. REUTERS