The Vietnam Manufacturing Purchasing Managers’ Index (PMI
), which measures the country’s manufacturing performance, posted 52.6 in June, in line with the reading of 52.7 from May, signaling a further solid improvement in the health of the sector, Nikkei has said in a report.
The rate of expansion in manufacturing output in Vietnam quickened for the fourth successive month and was the sharpest since July last year, thanks to higher new orders.
Nikkei notes that total new business continued to increase at a solid pace, albeit one that was slightly weaker than in May. The rate of expansion in new export orders, on the other hand, accelerated to a 14-month high.
Increased production facilitated a reduction in backlogs of work during June, the third in as many months. Moreover, the latest fall in outstanding business was the sharpest since October last year.
Higher output requirements led manufacturers to increase both their employment and purchasing activity, which has now risen in each of the past seven months, says the report.
Despite further growth of input buying, stocks of purchases decreased as items were used in the production process. This followed an increase in the previous month. Stocks of finished goods also fell in June, marking the sixth successive month of decline.
Although input prices continued to increase in June, the rate of cost inflation eased to the weakest in the current four-month sequence of rising prices.
Meanwhile, output prices decreased for the first time in three months, albeit only slightly. According to respondents, weak cost inflation contributed to lower charges.
“The Vietnamese manufacturing sector continued to build on a positive start to the year in June, with output growth continuing to accelerate on the back of solid expansions in new orders from both home and abroad. Helping firms to secure new business was competitive pricing, in turn facilitated by a moderation of cost inflation in the sector,” said Andrew Harker, at Markit, which compiles the survey.