PMI of Vietnam in June: Employment increases at record pace

According to the recent announcement of Nikkei – HIS Markit, Vietnam Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, rose to 55.7 in June from 53.9 in May.

It is notable that there is record rise in staffing levels amid strong growth of output and new orders. Higher output requirements also lead to marked increase in purchasing and inflationary pressures intensify

Manufacturing output increased at a substantial pace as the rate of growth accelerated for the third month running. The rise was the second-fastest since the survey began, behind only that recorded in March 2011.

Panelists reported that higher new orders and stronger client demand had been behind the rise in output. In line with the picture for production, the rate of growth in new orders was among the steepest seen across the survey’s history so far. New orders have risen continuously since December 2015.

Higher workloads led firms to take on extra staff in June. Moreover, the rate of job creation quickened to a new survey record. Record hiring helped firms to reduce their backlogs of work fractionally, despite strong new order growth.

Manufacturers also upped their purchasing of inputs sharply in June, with the rate of expansion the third-fastest in the series so far.

Manufacturers responded to higher input costs by raising their output prices, extending the current sequence of inflation to ten months. Selling prices also increased at the fastest pace since February.

Andrew Harker, Associate Director at IHS Markit, which compiles the survey, commented that: “The Vietnamese manufacturing sector appears to be motoring midway through 2018, with growth of output and new orders among the fastest seen since the survey began in 2011. The current growth phase has been extremely positive for Vietnamese workers, with firms taking on extra staff at a record pace during June”.