Industrial production in Q1 2026 rises 9%, the highest in seven years

Industrial production in Q1 2026 rose to the highest level since 2020. Data released by the General Statistics Office (Ministry of Finance) on the morning of 4 April 2026 estimated that the Industrial Production Index (IPI) for March increased 18.8% month-on-month and 6.9% year-on-year.

March performance and sector breakdown

The General Statistics Office reported that the water supply, environmental management and treatment, and wastewater management sector rose 12.1% year-on-year. The processing and manufacturing sector increased 7.5%, while the production and distribution of electricity rose 4.6%. Mining grew 2.6% year-on-year.

Quarterly results: Q1 2026 growth

For the first quarter of 2026, the IPI is estimated to increase 9.0% year-on-year (Q1 2025 up 8.3%). Within the quarter, the processing and manufacturing industry rose 9.7%, contributing 7.6 percentage points to the overall increase. The water supply, environmental management and treatment, and wastewater sector increased 7.8%, contributing 0.1 percentage point. The production and distribution of electricity rose 6.3%, contributing 0.6 percentage point, while mining rose 4.7%, contributing 0.7 percentage point.

Key industrial products: faster growth and declines

Several key industrial products recorded strong year-on-year growth in Q1 2026, including motorcycles (+31.6%), processed seafood (+23.4%), steel bars and angles (+21.1%), rolled steel (+20.3%), chemical paints (+19.2%), and cars (+18.5%). Other notable increases included infant formula (+14.5%) and iron and crude steel (+14.3%).

Some products declined versus the same period last year, including urea fertilizer (-9.6%), mobile phones (-6.6%), mixed NPK fertilizer (-5.4%), coal (clean coal) (-4.9%), and fabrics spun from natural fibers (-3.5%).

Production-consumption balance and inventories

An “important bright spot” in Q1 2026 was the alignment between production and consumption. The consumption index for the entire processing and manufacturing sector rose 9.5% year-on-year (the same period in 2025 up 5.4%). Correspondingly, the average inventory level in Q1 2026 declined to 84.8% from 90.0% in the same period last year.

Labor market: employment trends in industrial enterprises

Employment also improved. As of 01/3/2026, the number of workers employed in industrial enterprises rose 1.1% from the previous month and 2.4% from the same time last year. Workers in state-owned enterprises rose 0.2% and fell 0.2% (month-on-month and year-on-year figures as reported). Workers in non-state enterprises rose 1.1% and fell 0.4%, while workers in foreign-invested enterprises rose 1.2% and rose 3.4%.

Employment by sector

By activity sector, the number of workers in mining remained unchanged from the previous month and rose 1.2% year-on-year. In processing and manufacturing, employment rose 1.1% from the previous month and 2.4% year-on-year. In the production and distribution of electricity, gas, hot water, steam and air conditioning, employment rose 0.4% from the previous month and 3.3% year-on-year. For water supply and wastewater management, employment rose 0.1% from the previous month and 2.6% year-on-year.