Vietnam: Manufacturing PMI inches up in February
March 1, 2018
The manufacturing sector continued expanding at a healthy pace in February: The Nikkei Manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, inched up to 53.5 points from 53.4 points in January. A reading above the critical 50-point mark reflects an expansion in manufacturing output, while a reading below the threshold denotes a contraction.
Stronger demand fueled an upturn in new orders and manufacturing production in February. New orders rose for the twenty-seventh consecutive month and output expanded at the swiftest pace in 10 months. Higher demand from overseas markets led to a solid rise in new export orders. Firms boosted their purchasing activity and raised their inventory levels to support the growth in output. Despite the expansion in new business, backlogs of work declined at the fastest rate in 20 months as firms sought to reduce their outstanding business and raised staffing levels. Although, the rate of job creation lost some pace from January. Prices for inputs were pushed up again due to higher costs for raw materials; reports suggest that stronger demand for inputs prompted suppliers to bump up their prices. In response, firms raised their output prices. While firms remained upbeat that output will climb over the coming year, business sentiment fell to the lowest level since June last year.
Author: Nihad Ahmed, Economist