Vietnam’s Manufacturing Further Improve in May, Nikkei says

Diep Nguyen

16:37 04/06/2019

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Customer demand improved, and there were rises in new orders both from domestic and overseas clients. Business confidence reached a six-month high.

Vietnam’s Manufacturing Further Improve in May, Nikkei says

Photo: Bloomberg

Vietnam's manufacturing sector showed further improvement in May, supported by sharper increases in output and new orders, as reported by Nikkei in the latest report.
According to Nikkei, the Nikkei Vietnam  Manufacturing Purchasing Managers' Index, or PMI, fell marginally to 52.0 in May from 52.5 in April. Readings above 50 point to expansion, while those below 50 indicate contraction.
Customer demand improved, and there were rises in new orders both from domestic and overseas clients. Business confidence reached a six-month high.
Fall in the index reflected a drop in employment. 
"There appear to be issues around the supply of labour... with reports of resignations and retirements leading to reduced employment levels in spite of the aforementioned improvements in demand and output requirements," said Andrew Harker, associate director at IHS Markit which compiles the survey.
Lower PMI "could be reversed in coming months should the demand side remain strong and firms be able to replace departed workers," Harker adde
In the recent article, Bloomberg reported that Vietnam ranks first among countries benefiting from the China – US trade war escalation. The other countries and territories benefiting that are listed by Bloomberg are Taiwan, Chile, Malaysia, Argentina. Bloomberg got the research results from Nomura Research Holdings. 
Bloomberg said that Vietnam gained orders from trade diversion on tariffed goods equal to 7.9% of gross domestic product in the year through the first quarter of 2019, according to a study by Nomura Holdings Inc. economists Rob Subbaraman, Sonal Varma and Michael Loo. 
Taiwan is a distant second among the winners, with gains equivalent to 2.1% of GDP. Both economies gained far more from U.S. tariffs on China than from Chinese duties on the U.S.
Nomura started with the official tariff lists of product codes and compared those with monthly trade data of the same goods -- incorporating the levies on $250 billion in Chinese goods and $110 billion in U.S. products. The analysts estimated the gain for the world’s top 50 economies in the 12-month period.
U.S. tariffs on China have prompted import substitution primarily in electronic products, followed by furniture and travel goods. For China’s duties on the U.S., orders for soybeans, aircraft, grains and cotton were most likely to be diverted away from the U.S. to third-party economies like Chile and Argentina.

DIEP NGUYEN

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