Vietnam continues to be among the top attractive destinations for the manufacturing industry, according to Cushman & Wakefield’s 2022 Manufacturing Risk Index (MRI).

Asia markets have dominated the annual study ranking top manufacturing destinations according to baseline, cost, and risk scenarios, holding the most top quartile rankings of any region across each of the scenarios. China remains the top destination across all three scenarios.

The report assesses the most suitable locations for manufacturing among 45 countries and territories in Europe and the Middle East, the Americas, and Asia-Pacific regions based on variables grouped by cost, risk, and general business conditions. These three variables will combine to rank 45 countries into the three scenarios: Baseline, Cost, and Risk.

In the baseline scenario - which attributes 40 per cent weight to both business conditions and cost, and 20 per cent to risk - Asian markets accounted for six of the 12 top quartile positions, including all of the top five. The report noted that India, Indonesia, Malaysia, and Thailand all benefited from the availability of relatively low-cost labor combined with governments actively seeking both domestic and foreign investment in manufacturing and production.

These markets have also benefited from the China+ approach, which has seen companies looking to improve supply chain resilience by diversifying their production bases beyond China.

Similar trends are also benefiting Vietnam, which has seen rapid expansion of its industrial sector over recent years. The market also benefits from geographical connectivity both within the region and to markets outside of the region. Indeed, as a result of burgeoning demand for new manufacturing facilities in Vietnam, major shipping lines such as MSC, Maersk, and CMA CGM are investing in new capacity in the country to expand their operations.

On a cost basis - 60 per cent weight is attributed to cost and 20 per cent each to conditions and risk - Asia’s dominance increased further, with Thailand, the Philippines, and Vietnam being the top Southeast Asian countries.

Mr. Dennis Yeo, Asia Pacific Head of Investor Services and Logistics & Industrial, said that China retained top position across all scenarios, which is testament to its strength in the manufacturing space. “Although there continue to be local headwinds, China’s supply chain stress has reduced to almost pre-pandemic levels,” he added. “India continues to outperform as a destination for manufacturing in south Asia and we expect Southeast Asian markets, including Thailand, Malaysia, Vietnam, and Indonesia, to continue benefiting from companies pursuing a China+ strategy.”