Vietnam sees 2.3% fewer new firms in 2020 as manufacturing output returns to growth in December


A street vendor selling snacks pushes her bicycle past an art gallery in Hanoi on Monday (Jan 4, 2021). - AFP
HANOI, Jan 4 (Xinhua): Around 134,900 enterprises were established in Vietnam in 2020, decreasing 2.3 per cent from the previous year, according to the country's General Statistics Office on Monday.

The registered capital of the new enterprises totaled over 2,235.6 trillion Vietnamese dong (US$97.2 billion), however, up 29.2 percent, said the office.

New firms in the agriculture, forestry and fishery sector grew 30.1 per cent, while those in industry and construction expanded 10.2 per cent and services sector down 7.6 per cent.

In 2020, nearly 44,100 firms that previously temporarily ceased operations due to difficulties resumed their activities, posting an increase of 11.9 per cent. Meanwhile, some 17,500 enterprises were dissolved, up 3.7 percent on a yearly basis.

In December alone, roughly 10,700 new firms were formed, down 18.4 percent against November, the office said.

In 2019, Vietnam saw 138,100 enterprises established with total registered capital of over 1,730 trillion Vietnamese dong (US$75.2 billion).

Meanwhile, Vietnam's manufacturing sector ended 2020 in growth as business conditions improved with the increase of output, new orders and employment, a report compiled by the London-based global information provider IHS Markit revealed Monday (Jan 4).

The Vietnam Manufacturing Purchasing Managers' Index (PMI) rose to 51.7 in December, up from 49.9 in November, showing a modest improvement in business conditions in Vietnam's manufacturing sector, according to the report.

Data also signaled a return to growth of manufacturing output as production volumes recovered from the storm-related disruption in the previous month. New order growth was central to the expansion in production.

The higher number of new orders was central to the expansion in production, as it led to increased production requirements and encouraged firms to expand their staffing levels.

Manufacturers remained confident that output would increase in 2021, with respondents expecting less disruption from the COVID-19 pandemic.

"Firms are confident looking ahead to the new year, with hopes that export demand, in particular, will recover should the COVID-19 pandemic be brought under control worldwide," Andrew Harker, economics director at IHS Markit, commented on the survey results, adding that severe supply-chain disruption, which is often linked to the pandemic, appeared to be the main issue hampering growth at present.

A PMI reading above 50 indicates an expansion of the manufacturing sector compared to the previous month; below 50 represents a contraction; while 50 indicates no change. - Xinhua

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