Vietnam: Manufacturing PMI makes gains in June
July 3, 2017
Growth picked up in Vietnam’s manufacturing sector in June following a notable slowdown in May. The Nikkei Manufacturing Purchasing Managers’ Index (PMI) reported by IHS Markit rose to 52.5 in June from May’s 14-month low of 51.6, sitting well above the crucial 50-point threshold that separates expansion from contraction.
June’s solid pace of growth was underpinned by a sturdy rise in new orders in the consumer and intermediate goods sectors coupled with strengthening client demand, which bolstered increases in output, employment and purchasing activity. A faster rate of job creation added to operating capacity and aided a reduction in backlogs of work at some companies. Meanwhile, an acceleration in input cost inflation raised firms’ cost burden. Nevertheless, firms lowered their output prices amid a fall in the cost of some inputs and in a bid to secure more sales. Business sentiment eased further in June however, marking the fourth consecutive month of decline and the weakest level since June 2013. Nonetheless, market expectations are optimistic that demand will strengthen going forward.
Author: Nihad Ahmed, Economist