The reading, a composite single-figure indicator of manufacturing performance, for October is fractionally above the 50.0 no-change market and thereby signals little change in business conditions over the month, Nikkei said in its latest report.
A marginal increase in production helped the headline index to rise back above the 50.0 mark, says the report.
New business decreased marginally overall in October, the second successive month in which a reduction has been recorded. Panelists linked the fall to declining client demand, which was also a factor behind a fifth consecutive monthly contraction in new export orders.
October recorded the second successive monthly reduction in purchasing activity, with panelists indicating that holdings of inputs were sufficient to meet output requirements. Consistent with this was a marginal increase in stocks of purchases, ending a three-month sequence of depletion.
Stocks of finished goods also rose, taking cues from September. According to respondents, an increase in production, a fall in new orders and delays in distributing products to customers had all contributed to the increase in post-production inventories.
“The Vietnamese manufacturing sector stabilized in October, providing some reassurance that the deterioration seen in September was not the start of a prolonged downwards trend. That said, the strong growth seen earlier in the year now seems a long way off, with external markets looking to be the key headwind at present. Firms will hope for an improvement in global economic conditions to help support a return to growth,” Andrew Harker at Markit commented.
“Falling raw material costs were again recorded in October, leading both input prices and output charges to decrease further. However, the respective rates of decline eased,” the specialist said.
weakened to 49.5 in September, following readings of 51.3 in August and 52.6 in July, bringing an end to a two-year sequence of improvement of the manufacturing sector.