According to Nikkei – HIS Market’s press releases, Vietnam Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – posted 53.7 in August, signaling a further solid improvement in business conditions.
Vietnamese manufacturers continued to record growth of new orders during August. Although the rate of expansion eased, it remained sharp amid reports of improving client demand.
New export orders also rose again over the month, but to a lesser extent than total new business. Meanwhile, backlogs of work decreased marginally for the third month running.
Continued strong growth of new orders resulted in a further monthly increase in manufacturing production. August’s rise in output was solid, albeit the slowest since April.
A slowdown in employment growth was also registered, with the rate of job creation in August being much weaker than June’s record high. Where staffing levels increased, this was linked by panelists to rising workloads.
Input prices continued to rise sharply, albeit at a reduced rate. Where input costs increased, this was linked to higher raw material prices and a depreciation of the Vietnamese dong against the US dollar. Rising input costs fed through to an increase in output prices.
According to the report of Nikkei – IHS Markit, despite remaining optimistic overall, Vietnamese manufacturers recorded a marked drop in confidence during August, with sentiment being the lowest since the series began in April 2012.
Commenting on Nikkei’s survey, Andrew Harker, Associate Director at IHS Markit said that: “Business confidence dropped the lowest since the series began in early-2012 suggesting that concerns around global trade flows may start to impact Vietnamese firms over the coming months.”