Vietnam: Manufacturing PMI inches up in August
September 1, 2017
The Nikkei Manufacturing Purchasing Managers’ Index (PMI) reported by IHS Markit inched up to 51.8 in August from 51.7 in July. It remains above the crucial 50-point threshold that separates contraction from expansion, indicating continued expansion in the manufacturing sector.
Driven by stronger demand, modest improvements in the rate of growth in output and new orders underpinned the healthier print. New export orders grew at the swiftest pace in four months. Rising new orders led to a boost in backlogs of work, which prompted firms to hire more staff, although employment growth eased to the slowest in 17 months. Input cost inflation surged to a four-month high because of raw material shortages, which also lengthened suppliers’ delivery times. Despite the notable rise in input costs, firms followed suit from July and cut their output prices marginally. Business confidence strengthened in August, climbing to the highest level since March. There are indications that firms will continue to boost output in the upcoming months as capacity improves and new orders are projected to increase.
Author: Nihad Ahmed, Economist