Telling stat an eye opener

General Statistics Office figures (GSO) revealed that the inventory of industrial processing products during the past six months bounced 127.5 per cent year-on-year.

Among the inventories, non-alcohol products rose 489.6 per cent, cement 246 per cent, garment and textile 104 per cent, steel products and electric cables 132 and 205 per cent respectively.

The GSO reported that existing high inventory ratio was in stark contrast to the economy’s doldrums during 2008-2009 when inventories increased due to low consumption and manufacturers had to slow production.
“Manufacturers are bolstering their production and restocking their shelves to meet the expanding consumption in domestic and export markets,” said Pham Dinh Thuy, head of GSO’s Industry and Construction Department.

Thuy said the active inventories would keep the economic recovery on track to at least 6.5 per cent growth this year. “That indicates enterprises are confident on the economic outlook and will expand production and create jobs,” said Thuy.

Industrial production value grew 13.6 per cent in the first two quarters, three times higher than the same period last year. Meanwhile, the consumption for processing products rose 111.5 per cent year-on-year and total retail turnover increased 26.7 per cent.

The ongoing global economic recovery has also benefited Vietnam’s exports. The Ministry of Industry and Trade (MoIT) reported exporters had received more orders than expected with export turnover during the past six months rising 15.7 per cent year-on-year. Late last year, The MoIT forecasted export turnover this year would increase only 6 per cent year-on-year.

“As sales rise, businesses will have reason to add to their stocks. They certainly need the inventory to support coming orders,” said Cao Sy Kiem, president of Vietnam Association of Small and Medium Enterprises.

On the other hand, high inventory was also in line with the government’s inflation fighting policy which asked enterprises, especially state-owned ones, to push production to ensure there was no product shortages, said Kiem, who is also a member of the Consulting Committee for National Monetary Policy.

In April 2008, rice shortage rumours in Vietnam, the world’s second largest exporter, sparked an artificial rice price fever in the country. The fever pushed the consumer price index in May, 2008 up a record 3.91 per cent.