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Viet Nam becomes leader in global production shift trend
Viet Nam has surpassed Mexico to become the leader in the “nearshoring” trend (companies moving production, services and logistics activities from a distant country to neighboring countries).
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| An exhibition booth at the World Trade Center, Binh Duong New City, May 2024. Photo: VNA |
According to a recent article published by riotimesonline.com on November 17, citing new data from S&P Global Market Intelligence, Viet Nam has emerged as the premier destination for manufacturing relocation as companies seek to protect their supply chains from disruption.
The S&P Global Market Intelligence data reveals that Viet Nam has surpassed Mexico to become the leading country in nearshoring trends, where companies relocate their manufacturing, services, and logistics operations to neighboring countries.
Major corporations have demonstrated this shift, with Samsung making substantial investments in electronics manufacturing facilities in Viet Nam. Similarly, Nike and Adidas have moved their production operations to the country, while Intel has established a significant presence with a chip manufacturing plant in Ho Chi Minh City.
Over 35 percent of Vietnamese companies reported increased demand from multinational manufacturers in the past year, contrasting sharply with Mexico, where only 15 percent of companies noted similar growth. A survey conducted in May 2024 further confirmed Viet Nam's growing appeal to international businesses.
The country's advantages include its strategic geographic location providing easy access to major Asian markets, competitive labor costs attracting cost-conscious companies, and government policies supporting foreign investment.
Viet Nam's workforce has played a crucial role in this success story, ranking ninth among 60 countries in ManpowerGroup's Total Workforce Index, demonstrating its reliable and skilled labor force.
While Mexico also benefits from nearshoring trends, its growth has been slower. Mexican manufacturers remain optimistic about future growth opportunities, though the impact has been less pronounced compared to Viet Nam.
Experts estimate the investment relocation window at 10-12 years, intensifying competition among emerging manufacturing hubs. This limited timeframe emphasizes the urgency for countries to act swiftly in attracting and retaining these investments./.
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