Vietnam: Manufacturing PMI hits lowest level in over two years in November
December 1, 2015
The Nikkei manufacturing Purchasing Managers’ Index (PMI) dropped from 50.1 in October to 49.4 in November. The increase moved the indicator just below the 50-threshold that separates contraction from expansion in business conditions. However, November is only the second month since September 2013 in which the manufacturing PMI has been in pessimistic territory.
The monthly figure reflects that new orders decreased marginally in November and marked the third consecutive decline. This was the result of declining customer demand, which, in turn, lead to lower new business. Subdued foreign demand caused new export orders to decline for the sixth consecutive month. Reductions in new orders resulted in the first decline in employment since March 2015. Nikkei stated that, “the Vietnamese manufacturing sector is going through a period of stagnation at present, with new contracts difficult to secure. The recent soft patch has now fed through to the labor market, with employment falling for the first time in eight months during November. […] Meanwhile, reduced prices in global commodity markets continued to impart deflationary pressures on the sector, with both input costs and output prices falling solidly again.”