Vietnam’s Manufacturing Purchasing Managers’ Index (PMI
), an indicator of manufacturing performance, posted 52.2 in August, compared to 51.9 in July, marking the ninth month in a row above the neutral mark of 50.
Business conditions improved at a stronger pace in spite of weaker rises in both output and new orders during the month. The rate of growth in new business eased for the third month running, while new export orders also increased at a slower pace, Nikkei and HIS Markit said in a joint report.
August’s increase in output was the weakest in five months, but extended the current sequence of growth which began in December last year. Investment goods producers recorded a rise in production, but output dipped in the consumer and intermediate goods sectors.
According to the report, Vietnamese manufacturers employed extra staff at a solid pace in August, and one that was the fastest since December 2013. This helped firms to reduce their backlogs of work, as has been the case in each of the past five months.
Manufacturers raised their purchasing activity in line with higher new orders in August. Moreover, the rate of expansion picked up slightly from that seen in July.
Stocks of finished goods continued to decrease in August, extending the current sequence of decline to eight months, the report added.
“The latest PMI data for Vietnam are something of a mixed bag again. The data are generally positive, with rates of expansion in employment and stocks of purchases particularly strong,” said Andrew Harker, at IHS Markit, which compiles the survey.
“On the other hand, output and new orders increased at weaker rates, suggesting that client demand is showing signs of softening. Adding to this picture is the fact that firms often had to offer discounts in order to secure new work,” Harker added.
IHS Markit forecast Vietnam’s GDP
growth at 5.85% in 2016 and these latest figures suggest that the manufacturing sector will continue to make a solid contribution to the overall economy