Higher PMI signals improved health of manufacturing sector: survey

The Purchasing Managers’ Index (PMI) of Vietnam rose to a four-month high of 52.5 in April (Photo: VNA)

In a news release on May 2, Nikkei said growth was maintained in the Vietnamese manufacturing sector during April as firms were again successful in securing new orders, which increased at a rate broadly in line with that in March. Manufacturing production rose for the seventeenth successive month.

Meanwhile, purchasing activity continued to rise solidly, with the latest increase helping to support the first accumulation in pre-production inventories since January. Stocks of finished goods also expanded.

New orders are predicted to increase further over the coming year, helping to boost sentiment around production volumes. Business expansion plans are also set to support output growth.

Although the rate of input cost inflation accelerated to the sharpest since last November, manufacturers in Vietnam continued to lower their output prices. Charges were reduced for the fifth consecutive month, linked to efforts to secure greater new order volumes.

Andrew Harker, Associate Director at IHS Markit, which compiles the survey, said: “The main positive from the latest Vietnam manufacturing PMI survey was a return to employment growth, the first rise in three months, as firms gained confidence that the soft patch at the start of the year is now a thing of the past. There was still a reluctance to raise selling prices, however, in spite of a pick-up in the rate of cost inflation, but this will likely change should solid inflows of new work continue in coming months.”