Vietnam continues to grow as a manufacturing destination and topped the Growth Index inthe Cushman & Wakefield (C&W) Manufacturing Index 2015 report released recently.
The pace of growth in the country’s retail market continues to present opportunities to retailers and manufacturers of fast-moving consumer goods (FMCG) as the sector expands, according to the report.
“The markets of Asia Pacific continue to remain particularly attractive to manufacturers and this shows in our latest index rankings,” Mr. Richard Middleton, Head of Occupier Services in EMEA (Europe, the Middle East and Africa) and Asia Pacific commented. “Malaysia has retained top place in our main index for the second year running and Vietnam tops our growth index and is maturing as a manufacturing destination.”
From a broader perspective, he added, there remains some volatility at play. While China remains the world leader in terms of manufacturing output and benefits from the scale of its immediate marketplace, rising labor costs have caused a shift in strategy for some manufacturers.
This has not only benefited the APAC regions of Malaysia and Vietnam but has also added to a re-shoring trend, with a number of manufacturers moving their plants and facilities back to Western markets. “This has strengthened the prospects of certain European locations, notably Turkey, which has positioned itself at the crossroads of Europe, Asia, Russia, and Africa,” Mr. Middleton said.
The C&W Manufacturing Index 2015 report uses 36 data sources that make up three key parameters identified as being crucial to manufacturers during site selection or expansion: Costs, Risk and Conditions. Through ongoing discussions with a number of major manufacturers, its base scenario takes the example of a highly automated manufacturer, weighting these parameters as follows: Costs (40 per cent), Risks (20 per cent), and Conditions (40 per cent).
Its main index ranks the 30 largest countries by manufacturing output, defined by United Nations Conference on Trade and Development (UNCTAD), and its growth index ranks the Top 15 manufacturing locations less established in terms of output by growth.