Vietnam PMI


Vietnam: Manufacturing PMI returns to expansionary territory in October

November 2, 2015

The Nikkei manufacturing Purchasing Managers’ Index (PMI) increased from 49.5 in September to 50.1 in October. The increase moved the indicator just above the 50-threshold that separates expansion from contraction in business conditions. October’s result marked a rebound to positive territory after the PMI dropped into contractionary territory last month for the first time since August 2013.

The monthly figure reflects declines in new orders. New orders decreased marginally in October and marked the second consecutive decline. The drop in new orders resulted in a drop in backlogs of work and weaker job creation, which grew at the slowest rate in seven months. On the up side, production rose slightly in October thanks to falling raw material prices. The drop in prices resulted in a reduction of input costs and output prices. Nikkei stated that, “the Vietnamese manufacturing sector stabilized in October, providing some reassurance that the deterioration seen in September was not the start of a prolonged downward trend. That said, the strong growth seen earlier in the year now seems a long way off, with external markets looking to be the key headwind at present. Firms will hope for an improvement in global economic conditions to help support a return to growth.”

FocusEconomics Consensus Forecast panelists see investment rising 8.2% in 2015, which is unchanged from the previous month’s estimate. For 2016, the panel expects investment to grow 8.4%, which also unchanged from the previous month’s estimate.

Author: Jean-Philippe Pourcelot, Economist

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Vietnam PMI Chart

Vietnam PMI October 2015

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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