Hanoi (VNA)🔜 – Up to 61.4 percent of a total 5,663 enterprises in the processing-manufacturing sector faced more difficulties in production and business activities in the third quarter compared to the previous quarter due to COVID-19 impacts, according to a survey conducted by the General Statistics Office (GSO).

According to the survey on business tendency of processing-manufacturing enterprises in the third quarter and forecast for the fourth quarter of 2021, the complicated pandemic developments have greatly affected production and business operations, including the processing-manufacturing sector, especially in 19 southern localities implementing prolonged social distancing measures. The survey said that only 38.6 percent of the firms said that their operation was better than in the second quarter. For the fourth quarter of 2021, 73.7 percent of businesses expected better and stable production and business situation, while the ratio of firms predicting more difficulties is 26.3 percent.

Numerous difficulties

Regarding factors affecting production and business activities in the third quarter, 50.9 percent of enterprises pointed to low domestic market demand, while 40 percent of the firms cited high competition of domestic products. Meanwhile, 35 percent of the firms said that they were facing financial difficulties, 33 percent were suffering a shortage of materials. At the same time, 24.2 percent of exporting businesses said their difficulties came from low demand on the international market and 18.1 percent complained about fierce competition of imported products. The survey also pointed out factors affecting production and business activities in four southern localities hardest hit by the latest COVID-19 resurgence. Specifically, 90.3 percent of enterprises in Ho Chi Minh City, 49.3 percent in Binh Duong, 90.3 percent in Dong Nai and 79.9 percent in Long An said that they had faced greater difficulties. For the fourth quarter of 2021, the ratios of enterprises predicting more difficulties in the localities are 50.6 percent, 12.8 percent, 24.2 percent and 10.5 percent, respectively.

Reduction in new orders in Q3

Over the number of new orders in the third quarter, 44.6 percent of enterprises involving in the survey said that the numbers of orders they received rose or unchanged compared to the second quarter, while 55.4 percent reported a reduction. Regarding the number of new orders in the fourth quarter, 75.7 percent hope for higher or stable number of orders, while only 24.3 percent thought they would receive fewer orders. Mentioning new export orders in the third quarter, 48.8 percent of the firms reported more or unchanged number of new orders compared to the second quarter, while 51.2 percent said that they suffered reduction. In the fourth quarter, 77.6 percent expected that there would be more or stable new export orders compared to the third quarter, and only 22.4 percent predicted fall. In the third quarter, 89.8 percent of businesses said that production cost increased. The ratio is still high at 87.2 percent when mentioning the situation in fourth quarter. Data from the GSO showed that the index of industrial production (IIP) in the third quarter decreased by 3.5 percent over the same period last year. Meanwhile, IIP increased by 6.29 percent in the first quarter and 11.18 percent in the second quarter. In the four major industries, the mining industry saw a decrease of 7.17 percent year on year in this index. The remaining three industries had IIP increases over the same period last year, including processing and manufacturing (up 6.05 percent), electricity production and distribution (5.24 percent), and the group of water supply, management and treatment of waste and wastewater (4.14 percent). Due to the impacts of the pandemic, the third quarter was the first quarter of this year with a decrease in IIP. However, in the first nine months of this year, the IIP surged by 4.45 percent over the same period last year. The IIP of some key level 2 industries increased sharply in the first nine months of the year, including metal (up 28.4 percent year on year); electronic products, computers and optical products (7.7 percent); apparel (4.8 percent); leather (4.5 percent); prefabricated metal products (3.4 percent); and other non-metallic mineral products (2 percent). On the other hand, a number of industries had IIP reductions, such as crude oil and natural gas exploitation (down 12.4 percent year on year); beverages (4.2 percent); print (2.2 percent); and chemical products (1.1 percent). The GSO also reported that the consumption index of the processing and manufacturing industry in the first nine months increased by 2.8 percent year on year. Of which, this index in September increased by 12.4 percent month on month but decreased by 11.2 percent year on year. The average inventory rate of the processing and manufacturing industry in the first nine months was 81.1 percent, higher than the rate of 75.6 percent in the same period last year. In September, the inventory index of this industry increased by 3.5 percent month on month and 28.2 percent year on year./.