Tertiary Results of Vietnam’s Economic Growth
2014 has been quite a breakthrough year for the Vietnamese economy and manufacturing sector. The Southeast Asian nation is at last receiving proper recognition for their sound economic policies and efforts to bolster their manufacturing sectors. Standard & Poor’s, Fitch, and Moody’s has upgraded the county’s credit rating earlier this year with applause for Vietnamese efforts towards strong macroeconomic stabilization.
The rating upgrade was well deserved, as the Vietnamese economy continues to expand and create jobs. The GDP growth rate is up 5.62 percent when compared to same time last year and in October, the Vietnam’s Purchasing Managers Index (PMI) was rated at 51.0, indicating a positive outlook for the manufacturing for the country. HSBC forecasts that exports will account for nearly 80 percent of the country’s gross domestic product this year, making Vietnam one of the region’s fiercest competitors with their low cost labor and generous tax benefits for foreign buyers.
Due to this frenzy in manufacturing, logistics companies are receiving a massive increase in orders from Vietnam to various destinations throughout the world. Currently the country has one of the world’s fastest growth rates in airborne shipment rates and it is enticing the region’s biggest cargo airlines to shift more attention to the country. Earlier this year DHL opened a $10 million shipping facility at Ho Chi Minh City’s Tan Son Nhat International Airport to meet an increasing export demand in the country, while Korean and Cathway Airlines have expressed similar keens interest in expansion. In reference to a fully packed plane, a DHL representative was quoted as saying, “This symbolizes the rest of trade in Vietnam. We are going to have a good fourth quarter.” Surely his statement is accurate, as the American Chamber of Commerce in Vietnam reports that shipments may increase by 19 percent for ($29 billion) this year.
ET2C’s Vietnamese office has taken notice of this manufacturing upheavel, and in fact, our clients’ orders are actively contributing to this economic expansion. With focuses on a variety of hardgoods and softgoods, our Vietnamese office has been serving clients since 2007 from Ho Chi Minh City. In recent years we have seen increases in orders from Vietnam’s suppliers due to lowered labor costs, which can at times be 20% cheaper than neighboring countries. ET2C is also able to take advantage of Vietnam’s very low import and export tax duties, which in turn lowers costs for our clients. Contact us today to find out how we can set up value-added sourcing solution for your needs.