“This pointed to a negligible deterioration in business conditions at Vietnamese manufacturing firms,” Nikkei and Market said in a report released on Tuesday morning.
New orders decreased for the third month running in November while new export orders fell for the sixth successive month, according to the report.
Firms left their output unchanged during the month, following a fractional increase in October. While some panelists had raised production in response to new order growth, others saw lower new orders leading to a decline in output.
The investment goods sector remained an area of strength as output continued to expand, but falls were recorded in the consumer and intermediate goods sectors, the report says.
Nikkei noted that reductions in new orders led to a decline in employment, the first since March. Investment goods firms continued to raise staffing levels while reductions were seen in the consumer and intermediate goods sectors.
The report highlighted that input prices continued to fall amid reports of lower costs for raw materials such as oil and steel. Weaker demand in China had led to declining prices in commodity markets, panelists said.
“The Vietnamese manufacturing sector is going through a period of stagnation at present, with new contracts difficult to secure. The recent soft patch has now fed through to the labor market, with employment falling for the first time in eight months during November,” said Andrew Harker, at Markit.
“With global economic conditions remaining challenging, it appears that Vietnamese firms will have to wait to see a return to the strong growth rates recorded earlier in 2015.
“Meanwhile, reduced prices in global commodity markets continued to impart deflationary pressures on the sector, with both input costs and output prices falling solidly again,” the analyst commented.