The Purchasing Managers’ Index (PMI) of Vietnam’s manufacturing sector
posted 51 points in April, up slightly from 50.8 a month ago, signalling
improvements in operating conditions for the first time in almost two
years.
The figure was released by the Hong Kong and
Shanghai Banking Corporation (HSBC) in its recent report on Vietnam
’s PMI at the beginning of the second quarter.
According to the report, announced on May 2, manufacturing output rose
for the second successive month during April, albeit at a slightly
slower pace than in March.
Higher output reflected a
further increase in incoming new orders, as companies reported improved
sales to domestic clients. Meanwhile, subdued international market
conditions meant that the level of new export business showed only a
negligible increase compared to one month earlier.
Manufacturing employment also rose for the second consecutive month
thanks to job growth linked to the recent mild recoveries in production
and new order volumes.
April data pointed to a
further solid decrease in work-in-hand (but not yet completed) volumes. A
number of firms reported that they had satisfied existing contracts
from stock holdings to clear backlogs of work. Inventories of finished
goods were depleted for the sixth month running.
The report also said average input costs increased again during April,
with manufacturers reporting that they were paying higher prices in both
domestic and world markets.
Vietnam
manufacturers reported that competitive market conditions restricted
their ability to pass on rising costs to their clients. Subsequently,
average output prices declined for the first time in three months, with
the sharpest rate of decrease since December 2012.
Some manufacturers revealed that they were offering discounted prices in order to support sales volumes.
Stocks of purchases declined again in April, meaning that inventories
have fallen throughout the past one-and-a-half years. This was despite a
solid increase in input buying volumes, which was partly initiated to
reduce the pressure on raw material stocks.
The
expansion of manufacturing activity reflects a gradual improvement of
domestic demand, the HSBC said, adding the manufacturing sector
continues to see growth symbolised in the rise of employment and output.
While the economy is weighed down by the
underperformance of the state sector, the private sector, especially the
manufacturing industry, continues to pull its weight to sustain the
economy.
The year-to-date increase of foreign
investment into manufacturing shows Vietnam’s still-strong
competitiveness in labour-intensive manufacturing, said HSBC.-VNA