Vietnam: Manufacturing PMI dips to multi-year low in October
According to data released by IHS Markit, the manufacturing Purchasing Managers’ Index (PMI) fell to 50.0 in October from 50.5 in September. Thus, the index was in line with the 50-threshold signifying no change in conditions in October, ending a near-four-year run of expansion in the sector.
October’s fall was based on a continued slowdown in new order growth and a decline in output. Moreover, employment decreased for the second month running. Additionally, input price inflation accelerated, with output charges increasing for the first time in 11 months as a response.
October’s reading was not all doom and gloom, a point made by Andrew Harker, Associate Director at IHS Markit:
“It is important to note […] that the historical relationship between the Vietnam PMI and official data suggests that even a reading around the 50 mark translates into solid production growth in the official numbers. What we are likely seeing at present, therefore, is more of a growth slowdown than anything more concerning.”