Vietnam: Manufacturing PMI climbs in April
Manufacturing output climbed more rapidly in April, as indicated by an increase in the Nikkei Purchasing Managers’ Index (PMI) reported by IHS Markit. The PMI climbed to 52.7 in April, up from 51.6 in March. It remains above the critical 50-point mark—a reading above this threshold denotes an expansion in manufacturing output, while a print below it reflects a contraction. Business conditions have now improved for twenty-nine consecutive months, and April’s reading signals a faster pace of expansion in the manufacturing sector.
The print was underpinned by sharper expansions in output, new orders and employment. Output rose more swiftly in April compared to March. Rapid growth of new orders, along with machinery issues and staff shortages, led to an increase in backlogs of work and ended five months of decline. To meet the quicker rise in output, Vietnamese manufacturers increased their production requirements and job intake. Higher input prices prompted some firms to raise their output prices, although the upturn in prices was marginal and the weakest in eight months. Meanwhile, others offered discounts to lure in more customers.
Commenting on the manufacturing PMI for April, Andrew Harker, Associate Director at IHS Markit, stated:
“The ability of Vietnamese manufacturers to secure new business was at the forefront of the latest PMI survey, with new export business up particularly sharply in April. Competitive pricing looks to have been a key driver of firms’ success, with output prices rising only slightly despite strong cost inflation. Firms therefore appear willing to accept reduced margins in exchange for securing greater volumes of new work.”