This is the first occasion in five years that Vietnam has exceeded the ASEAN average of 65.3%. In addition, the share of companies predicting losses for the year decreased to 17.6%, a decline of 1.7 points from the previous year, indicating a second consecutive year of progress.

In the manufacturing domain, the profitability rate increased by 3.9 points to 74.1%, while the percentage of firms operating at a loss plummeted to 13%. Gains surpassing 15 points were noted in sectors such as paper, wood products, and printing; electrical and electronic components; as well as iron, steel, and non-ferrous metals.

Within the non-manufacturing sector, 61.2% of businesses reported profits, an increase of 3.3 points, though the percentage of loss-makers also inched up to 22%. Real estate leasing, education, and healthcare experienced upgrades of more than 20 points, while less than 50% of firms in transport equipment, mining, energy, tourism, entertainment, retail, and food services anticipated profitability.

JETRO attributed the recovery in manufacturing primarily to heightened export demand, whereas the key factor driving growth in non-manufacturing businesses was domestic demand. Nonetheless, escalating competition and increasing labor costs persist as significant challenges.

This year, 47.6% of the firms surveyed project higher profits, although more than 30% of transport equipment and parts producers expect poorer performance. Over the next year or two, 56.9% of firms intend to broaden their operations, an increase of 0.8 points year-on-year and the highest growth rate in ASEAN for the second consecutive year. Merely 4.2% anticipate downsizing, and only 0.7% are considering relocation or withdrawal.

Approximately 35% of Japanese firms in Vietnam export to the U.S., exceeding the regional average. Around one-third of these exporters predict significant negative effects from U.S. tariffs, primarily due to diminished demand from that market. Many companies are responding by reducing expenses, renegotiating prices, and diversifying their market presence.

Vietnam’s primary investment advantages remain its market size and growth potential (68.4%), affordable labor costs (55.2%), and political and social stability (53.2%). Conversely, intricate administrative procedures are the foremost concern, cited by 67.5% of companies, alongside issues of legal transparency and rising labor costs.

Japanese investment in Vietnam was estimated to be approximately US$3 billion last year, reflecting a 19.5% increase from 2024, with a growing focus on digital transformation and high-tech industries. JETRO highlighted that while Vietnam continues to be a premier investment destination in ASEAN, further administrative reform, improvement in legal transparency, and workforce development are essential to maintaining long-term appeal.