Vietnam: Manufacturing PMI regains ground in October
November 1, 2018
Vietnam’s manufacturing sector improved in October following a notable slowdown in September. The Nikkei Purchasing Managers’ Index (PMI) reported by IHS Markit rose to 53.9 in October from 51.5 in September, moving further above the critical 50-point threshold that separates expansion from contraction in manufacturing output.
October’s upturn came on the back of robust growth in new orders and output. New business inflows were driven by favorable demand conditions and in response, firms ramped up production. Moreover, new export orders growth also accelerated, pointing to solid external demand. Despite the rise in new orders, firms were still able to work through backlogs of work, which declined further in October, likely thanks to extra staff as hiring activity hit a three-month high. On the price front, manufacturers’ cost burdens eased to an over one-year low, which gave them room to cut their output prices, albeit only marginally.
Author: Lindsey Ice, Economist