The economic situation in the fourth quarter is better and more stable.

(Baonghean) - 89.7% of FDI enterprises, 84.2% of non-state enterprises and 82.1% of state-owned enterprises are optimistic that the production and business situation in the fourth quarter will be better and more stable. Industrial production in 2015 is showing a tendency to recover and develop much better than in the years during the global economic downturn of 2008 - 2014. The trend in the last quarters of the year is much more positive than in the first quarters of the year... these are encouraging signs for the domestic economy.

STABLE INCREASING PRODUCTION VOLUME

According to the report of the Ministry of Planning and Investment in the regular Government meeting in September, the results of the survey on quarterly production and business trends of the processing and manufacturing industry - an industry that currently contributes about 18% to GDP - showed that in the fourth quarter of 2015, the growth forecast is more positive than in the third quarter, when up to 85.6% of enterprises are optimistic that their production and business situation will improve and remain stable.

Regarding production volume: Up to 79.3% of enterprises assessed that production volume in the third quarter increased and remained stable compared to the second quarter, of which 39.9% assessed an increase and 39.3% remained stable, and 20.7% of enterprises assessed a decrease. Along with the upward trend of the third quarter, in the fourth quarter, up to 86.2% of enterprises forecasted that production volume would increase and remain stable. The rate of enterprises forecasting that production volume in the fourth quarter would increase compared to the third quarter was the most positive among FDI enterprises, with 53.5%, among state-owned enterprises was 50.7%, while the rate among non-state enterprises was the lowest, only 47.2%. Industries with positive forecasts for production volume in the fourth quarter to increase compared to the third quarter were the pharmaceutical, chemical and medicinal materials manufacturing industries, with the rate of enterprises forecasting an increase of 70.3%; Production of electronic products, computers and optical products is 64.5%; production of clothing is 56.1%; production of chemicals and chemical products is 53.6%.

Production at Hoa Sen Steel Factory (Nam Cam Industrial Park). Photo: Hoang Vinh

Regarding orders: The good news is that in the third quarter of 2015, up to 80.2% of enterprises confirmed that the number of new orders had increased and remained stable, of which 34.2% of enterprises assessed that the number of orders had increased. Meanwhile, only 19.8% of enterprises assessed that the number of new orders had decreased. In the same trend, the proportion of enterprises forecasting that the number of new orders in the fourth quarter was more positive, with 87.3% of enterprises forecasting an increase and remaining stable. Of which, 47.8% of FDI enterprises forecasted that new orders would increase, followed by the state-owned enterprise sector with 43.4% of enterprises, and 41.8% of non-state enterprises. Industries with high forecasts were the production of drugs, pharmaceuticals and medicinal materials with 58.3%; electronic products, computers and optical products with 56.1%; other processing and manufacturing industries with 55.3%; Production of beds, cabinets, tables and chairs and repair, maintenance and installation of machinery and equipment both reached 50%, production of paper and paper products reached 49.1%; production of chemicals and chemical products reached 48.2%; production of leather and related products reached 47.8%; production of motor vehicles reached 47.6%; production of clothing reached 47.3%; production and processing of food reached 46.6%.

INVENTORY REDUCTION

According to the Ministry of Planning and Investment, the survey on production and business trends included 4,028 enterprises representing 63 provinces and cities nationwide, and the number of enterprises that actually responded in the third quarter reached over 80%. The main information collected from enterprises to reflect production and business trends includes: enterprises' assessment of the overall trend of production and business situation, fluctuations in the number of orders and export orders, trends in finished product and raw material inventories; production costs, average selling price for a product, fluctuations in labor scale, factors affecting business operations. The survey results are calculated to reflect the production and business trends of the current quarter compared to the previous quarter and forecast the trend of the next quarter.

Accordingly, in September 2015, regarding export orders: 80.2% of enterprises said that the number of new export orders in the third quarter increased and remained stable, of which 51.7% of enterprises assessed it as stable and 28.5% of enterprises assessed it as increasing. Enterprises forecasted that the number of new export orders in the fourth quarter was more positive with 86.9% of enterprises forecasting an increase and remaining stable, of which 37.6% of enterprises forecasting an increase. By region, FDI enterprises forecasted the most positive increase with 41.5% of enterprises forecasting an increase, 29.6% of state-owned enterprises forecasted an increase and 35.7% of non-state enterprises had the same positive forecast.

Regarding product inventory: 21.7% of enterprises assessed that the amount of product inventory increased, 47.4% of enterprises said that the amount of inventory remained the same and 30.9% of enterprises said that the amount of finished products in inventory in the third quarter compared to the second quarter. It is expected that in the fourth quarter, up to 50.3% of enterprises will keep their forecast of keeping inventory stable, 33.5% of enterprises predict that inventory will decrease, only 16.2% of enterprises predict that inventory will increase. Of which, 27.1% of enterprises in the beverage manufacturing industry forecast an increase, 25% of enterprises in the printing and copying of all kinds of records forecast an increase, 24.3% of enterprises in the pharmaceutical, chemical and medicinal materials industry; 24.3% of enterprises in the electronics and computer industry forecast the same. Industries with businesses predicting a decrease are the pharmaceutical industry with 66.7% of businesses, the non-metallic mineral and metal production industry with 39% of businesses, and the precast metal industry with 38% of businesses predicting a decrease.

Regarding raw material inventory, 80.3% of enterprises assessed it to remain the same or decrease, of which 51.9% of enterprises assessed it to remain the same, 28.4% of enterprises assessed it to decrease, while only 19.7% of enterprises assessed it to increase. With the same trend, the forecast for the fourth quarter of 2015 shows that 85.1% of enterprises forecast the inventory volume to remain the same or decrease, of which 564.4% of enterprises forecast it to remain the same, only 14.9% of enterprises forecast it to increase. Regarding production costs and product selling prices, 90.3% of enterprises assessed that the production cost per unit of main product in the third quarter compared to the second quarter increased or remained the same, of which 26.7% of enterprises assessed it to increase, only 9.7% of enterprises assessed it to decrease. In the fourth quarter, 67.7% of enterprises forecast that production costs will remain stable, 20.5% forecast it to increase.

FORECAST FOR QUARTER 4 BUSINESS PERFORMANCE IS QUITE FAVORABLE

Also according to the Ministry of Planning and Investment, labor fluctuations in the third quarter showed that 86.9% of enterprises confirmed that the labor scale remained stable and increased, of which 70.1% of enterprises confirmed that it was stable and 16.8% of enterprises confirmed that it increased. The trend of labor fluctuations tended to increase in the fourth quarter when 90.8% of enterprises expected to increase labor and remain stable. The FDI sector forecasted that the number of employees in the fourth quarter would increase and remain stable with 92.6% of enterprises, the non-state sector was 90.2%, the lowest was SOEs, but also accounted for a high proportion with 89.4%. This shows that there is a solid foundation for increasing the efficiency of production and business activities.

In addition, regarding the utilization of machinery and equipment capacity, the average rate in the third quarter was 75.9%, of which the FDI sector had the highest utilization rate of 80.9% capacity, followed by the state-owned enterprise sector with 77.7% capacity and the lowest was the non-state sector with 73.5% capacity. Industries with a high coefficient of over 80% capacity were the production of garments, leather and related products, electronic products, computers and optics. Meanwhile, up to 45.6% of enterprises used 70 - 90% capacity, 31.4% of enterprises used 90 - 100% capacity of machinery and equipment.

In general, with 80.1% of enterprises assessing the production and business situation in the third quarter as more positive and stable compared to the second quarter, of which 36.6% of enterprises assessed it as increasing and 43.5% of enterprises remained stable, it can be said that the country's economic situation is relatively stable, with a good development trend. Accordingly, the industries with better and most optimistic production and business forecasts in the fourth quarter are the production of medicines, pharmaceutical chemicals and medicinal materials with 67.6% of enterprises confirming; the production of medicines and electronic, computer and optical products has 66.1% of enterprises with optimistic forecasts, while the production of beds, wardrobes, tables and chairs is 53.8%, the production of costumes is 50.4%, the production and processing of food is 48.8%, the production of leather and related products is 48.8%, the textile industry is 46.7%, the rubber and plastic industry is 46.2%. This also shows that the basis for the economic recovery and growth is quite clear. Not only that, it also achieved a high growth rate compared to the set plan, which is higher than the previous forecast as assessed by the Government in the first 9 months of the year.

Red River