Vietnam: Manufacturing PMI drops in March
The manufacturing sector lost some steam in March, reflected by a fall in the Nikkei Purchasing Managers’ Index (PMI), reported by IHS Markit. The PMI fell to a four-month low of 51.6 in March from a 10-month high of 53.5 in February. Nevertheless, it remains above the critical 50-point threshold—a reading above this mark denotes an expansion in manufacturing output, while a print below this reflects a contraction. The recent print indicated an improvement in business conditions for the twenty-eighth consecutive month but a slower pace of expansion in manufacturing output.
Output continued to climb, thanks to a solid upturn in new orders, supported by robust growth in exports. While there was a rise in new business from the previous month amid higher client demand, the pace of expansion moderated. As the growth of new orders eased, backlogs of work fell at the swiftest rate in three years. Higher output prompted manufacturers to hire more staff for the twenty-fourth month running, although the rate of job creation weakened to a seven-month low. The stock of inventories remained broadly stable. Input prices jumped again amid raw materials shortages and shipping delays but did so at a much slower rate compared to the previous month. Inflation fell markedly as firms lowered their output prices against a backdrop of stiff competition. Manufacturers remained upbeat over the prospect of higher output in the year ahead, with business sentiment rebounding from February’s eight-month low.