Vietnam PMI January 2016


Vietnam: Manufacturing PMI remains broadly stable in January

February 1, 2016

The Nikkei manufacturing Purchasing Managers’ Index (PMI) ticked up from 51.3 in December to 51.5 in January. The indicator is now above 50-threshold that separates expansion from contraction in business conditions. With the exception of two months in late 2015, the Vietnamese Manufacturing PMI has been in positive territory since September 2013.

The monthly figure reflects an increase in output on the back of new orders, which was fueled by greater client demand. New orders increased for a second consecutive month and expanded at a faster rate than in December. The increase in new orders contributed to a build-up of backlogs, the first in eight months. Input costs dropped for the seventh consecutive month as commodities prices remain subdued. The drop in input prices has contributed to a further decrease in output charges.

Nikkei stated that, “The most pleasing aspect of the latest set of manufacturing PMI figures for Vietnam was a quickening in the rate of growth of new orders at the start of 2016, showing that local firms are still able to generate new business despite a challenging global environment. […] With the TPP trade agreement set to be signed later this week, thereby kicking off the ratification stage, 2016 could lead to further positive developments in the Vietnamese economy following a solid start to the year.”

FocusEconomics Consensus Forecast panelists see investment rising 9.6% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects investment to grow 9.2%.

Author: Jean-Philippe Pourcelot, Economist

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Vietnam PMI Chart

Vietnam PMI January 2016 0

Note: Nikkei Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 point to a contraction.
Source: Nikkei and Markit

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