Vietnam: Manufacturing PMI drops to 10-month low in September
Vietnam’s manufacturing sector experienced a notable slowdown in September, as reflected by a dive in the Nikkei Purchasing Managers’ Index (PMI) reported by IHS Markit to a 10-month low. The PMI fell from 53.7 in August to 51.5 in September, moving closer to the critical 50-point threshold that separates expansion from contraction in manufacturing output and signifies a marked deterioration in business conditions in the private sector.
September’s lower PMI print reflected weaker upturns in output, new orders and employment, caused by less favorable demand conditions. Manufacturing output grew at the slowest pace in six months, and the rate of inflow of new business, while still firm, also eased from the previous month. New export orders rose at the weakest pace in 16 months. A slowdown in new order growth translated into reduced backlogs of work, which fell for the fourth consecutive month. While firms continued to hire more workers, the rate of job creation was the weakest since August 2017. On the price front, manufacturers’ cost burdens eased, which gave them room to cut their output prices to secure new business amid competitive conditions, ending a one-year period of uninterrupted rise.