Vietnam Manufacturing Purchasing Managers’ Index (PMI) rose to 52.5 in June from a 14-month low of 51.6 in May (Photo: doanhnghiepvn.vn)
Hanoi (VNA) – The Vietnam Manufacturing Purchasing Managers’ Index (PMI) rose to 52.5
in June from a 14-month low of 51.6 in May, the latest survey from
Nikkei’s IHS Markit showed on July 3.
A reading above 50 indicates economic expansion, while a reading below 50
points towards contraction.
“The pickup in growth in the Vietnamese manufacturing sector in June
allays some of the concerns that were raised by the marked slowdown seen in
May, with a solid rise in new business particularly encouraging,” Andrew
Harker at IHS Markit said.
“Although slightly down from the first quarter of the year, the average PMI
reading over Q2 points to a further solid expansion of Vietnamese manufacturing
output. IHS Markit forecast a rise of 6.2 percent in Vietnamese GDP this year,
with this data suggesting that the manufacturing sector continues to make a
positive contribution.”
According to the survey, the latest reading signalled a solid improvement in
the health of the sector and one that was above the average since the survey
began in March 2011.
After having slowed
significantly in May, the rate of growth in new orders accelerated in June. The
latest increase in new business was solid and linked by panellists to
strengthening market demand. New export orders also rose at a faster pace in
June.
The expansion in total new business reflected growth in the consumer and
intermediate goods sectors, with the pace of increase particularly strong in
the former. Meanwhile, investment goods firms saw new orders decline.
New order growth, allied with strengthening client demand, resulted in an
eighth successive monthly increase in output. The rate of expansion ticked up
from that seen in May.
The rate of job creation also accelerated in June, with manufacturers in Vietnam
responding to higher new orders and production requirements. This added
operating capacity facilitated the reduction of the work backlog at some
companies.
According to the survey, manufacturers raised purchasing activity for the 19-month
running, and at a solid pace. This helped lead to an increase in stocks of
purchases, with a number of firms mentioning their efforts to build inventory
reserves. Post-production inventories also expanded in June, but only slightly
as some companies used inventories to help fulfil orders.
“The rate of input cost inflation picked up but remained much weaker than
seen in the first three months of the year. Despite higher cost burdens, firms
reduced their output prices for the second month running amid reductions in the
costs of some inputs and efforts to secure sales,” it stated.-VNA