The headline Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI
), a measure of manufacturing performance, slid to 50.3 in February, down from 51.5 in January but remaining above the 50.0 neutral mark.
Vietnamese manufacturing output increased for the third month running, albeit only slightly and at a weaker pace than in January, Nikkei and Markit said in a joint report on Tuesday, adding that inventories of both purchases and finished goods decreased solidly.
The report notes that new orders rose at a slower pace in February. Meanwhile, new export orders also rose, and at a slightly faster pace than in the previous month.
Input prices fell at the fastest pace in three months during February, extending the current sequence of deflation to eight months, driven by a fall in oil prices.
In response to falling input costs, as well as fragile client demand, manufacturers lowered their output prices. The latest decrease was solid, but the slowest since last July, according to the report.
Nikkei Vietnam PMI.
In line with the trends for output and new orders, purchasing activity rose at a slight pace that was weaker than in the previous month. Meanwhile, stocks of purchases decreased to the greatest extent in two-and-a-half years.
“The Vietnamese manufacturing sector saw growth weaken in February as fragile global demand conditions hampered efforts to sustain the momentum gained at the start of the year,” said Andrew Harker at Markit, which compiles the survey.
“Reflecting this, a number of firms favored the running down of stocks to new purchasing or production. Meanwhile, costs continued to fall sharply on the back of lower prices for commodities, particularly oil,” the analyst added.