Local manufactures boost production despite globally weakening signs
By Hoai An
November 14, 2018 | 11:41 AM GMT+7
Although the global demand is slowing down, Vietnam manufactures expect product diversification, robust demand conditions and set targets to boost production in the coming 12 months.
According to Nikkei – IHS Market’s recent press releases, Vietnam Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – climbed from a ten-month low up to 53.9 in October from 51.5 in September.
It pointed to the strongest improvement in the health of the sector since July. Manufacturers scaled up production for the eleventh month running, with growth being the sharpest since July, leading to the employment expanding for the thirty-first month running.
New business increased markedly and at a quicker pace than in September, supported by favourable demand conditions internally and externally. Indeed, new export orders rose at the fastest rate in three months as companies benefited from expansion into new markets and greater client bases.
PMI of Vietnam since 2011
Vietnamese manufacturers also stepped up their outlays on raw materials and semi-finished products, with input purchase power expanding solidly and at a quicker pace than seen in September.
Strong demand for materials exerted some pressure on supply chains as highlighted by a renewed increase in vendor delivery times.
The upturn in quantities of purchases aided companies in their stock building initiatives. Holdings of inputs increased markedly in October, with the pace of accumulation being the quickest since the survey started in March 2011.
Similarly inventories of finished goods rose solidly and at the quickest pace in almost three-and-a-half years.
Manufacturers in Vietnam expect product diversification, robust demand conditions and set targets to boost production in the coming 12 months.
Commenting on the Vietnamese Manufacturing PMI survey data, Andrew Harker, Associate Director at IHS Markit, which compiles the survey, said: “Vietnamese manufacturers allayed fears of a protracted slowdown across the sector, with stronger rises in output, new orders and employment all recorded in October.”
“The success of firms in continuing to secure greater volumes of new work despite signs of weakening global demand stands them in good stead as the year draws to a close,” emphasized he.
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