TCF POST Report
Vietnam's manufacturing sector grew a robust 14.6% year-on-year in August, based on the latest Industrial Production Index (IIP) data — the fastest pace among the four major industrial groups, ahead of mining (up 18.5%), electricity production and distribution (up 11.8%), and water supply and waste management (up 9.5%). Within manufacturing, textiles, wearing apparel, and footwear — three of Vietnam's long-standing export industries — turned in decent growth of their own in August, though each came in below the sector's strong overall pace.
August by the numbers
Textile output rose 9.97% year-on-year in August — a solid gain in its own right. Wearing apparel grew 8.26%, also a decent showing. Footwear, grouped with leather products in the data, grew 4.78%, the softest of the three but still positive.
None of these numbers are bad on their own. They simply fall short of manufacturing's robust 14.6% overall gain:
• Footwear/leather trailed by roughly 10 percentage points
• Apparel trailed by more than 6 points
• Textiles trailed by close to 5 points
The pattern is not limited to August. Over the first eight months of 2026 versus the same period of 2025, manufacturing overall expanded 12.5%, while textiles rose 9.6%, apparel 6.5%, and footwear/leather 3.6% — respectable growth across the board, but consistently trailing manufacturing's stronger cumulative pace.
What is driving the gap
Much of manufacturing's headline growth in August came from capital-intensive segments rather than the garment and footwear trades that have historically anchored Vietnam's industrial exports. Sub-sectors such as electronic components and communication equipment posted much steeper year-on-year increases in August, lifting the manufacturing average well above where textiles, apparel, and footwear landed on their own.
Garments and footwear remain major sources of export revenue and factory employment in Vietnam, so single-digit growth in these industries — while still an increase — marks a noticeably slower pace than the double-digit expansion seen in electronics and other newer manufacturing lines. Possible factors include softer demand from key export markets, competition from other low-cost producers, or a cooling-off after stronger recovery growth in prior years.
Outlook
Textiles, apparel, and footwear all posted healthy growth in August — none of it weak — but each landed below manufacturing's robust 14.6% average. Mining also had a strong month (up 18.5%), driven by gains in metal ore extraction, while electricity and water/waste output grew at more moderate rates. Taken together, Vietnam's industrial economy in August shows two speeds: rapid expansion in tech-oriented manufacturing and mining, and steadier, still-positive growth in its traditional labor-intensive export sectors.
