The Purchasing Managers’ Index (PMI) survey for August released by HSBC
Vietnam on September 3 showed the seasonally adjusted PMI recorded 49.4
in August, an improvement on July’s 48.5 and the best reading since
April.
But it still signalled a marginal deterioration in operating conditions by remaining below the 50.0 no-change mark.
“Although output and new orders continued to fall, they did so at marginal rates,” the report said.
“There was a survey record increase in employment as manufacturers signalled positive expectations for activity.”
Profitability remained under pressure, however, as output charges were
little changed but prices rose at the sharpest pace since March. Rising
transportation costs were widely reported.
New
orders received by Vietnam ‘s manufacturers continued to fall in
August, extending the current run of contraction to four months.
Market activity remained slow, according to respondents, and customer
demand, soft. But there were reportedly pockets of growth, meaning new
work only contracted marginally.
New export orders
also continued to decline, falling marginally for a third successive
month. Export market conditions remained tough but showed signs of
stabilising.
Manufacturing volumes fell for a fourth
straight month in August as new orders declined. But, in line with the
sales trend, the degree to which output fell was modest.
Manufacturers were again able to make inroads into their backlog
during the latest survey period, causing it to fall for the 17th
successive month and again at a marked pace.
This
also reflected a depletion of inventories. Warehouse stocks fell
marginally for the first time in three months. Additional capacity also
helped companies to keep on top of workloads.
Employment rose for the first time since April, with the rate of growth
the sharpest in the survey history, reflecting the positive forecasts
for production and orders.
Profits came under
further pressure, reflective of two factors: Prices changed little due
to competitive pressures, efforts to stimulate sales, and client
requests for reduced prices but costs rose at a marked and accelerated
pace.
Inflation was driven also by a rise in the price of oil and associated derivatives.
The HSBC Vietnam Manufacturing PMI is based on data compiled from
monthly replies to questionnaires sent to 400 manufacturing companies.-VNA