Vietnam's PMI reached ten-month high in February

The Nikkei Vietnam Manufacturing Purchasing Managers' Index, or PMI, a composite single-figure indicator of manufacturing performance, posted 53.5 in February, up fractionally from 53.4 in January and signalling a solid monthly improvement in the health of the sector. 

The rate of growth in manufacturing output quickened to a ten-month high during February, with panellists reporting improved customer demand. This was also a factor behind another solid increase in new orders. 

New business has now risen in each of the past 27 months, with new export orders also expanding solidly in February. Despite further growth of new orders, backlogs of work decreased amid reports from firms of efforts to clear outstanding business. Moreover, the rate of depletion was the sharpest in 20 months.

Employment continued to rise at a solid pace in February, although the rate of job creation eased from that seen in January. Where employment increased, this was mainly linked to higher output requirements.

Alongside higher employment, firms also raised their purchasing activity to support output growth,while efforts to build inventories were also mentioned. The rise in input buying supported a solid increase in stocks of purchases, the most marked for a year. 

“The Vietnamese manufacturing sector continued its solid start to the year in February, with a number of the survey’s indices pointing to gathering growth momentum. This suggests that manufacturers are optimistic regarding the near-term prospects for client demand, while data on output expectations also signalled positive sentiment,” said Andrew Harker, Associate Director at IHS Markit, which compiles the survey.