Manufacturing News 09/08/2023, 03:19

Vietnam's manufacturing PMI shows signs of stability despite ongoing decline

The Purchasing Managers' Index (PMI) for Vietnam's manufacturing industry increased to 48.7 points in July, up from 46.2 points in June, according to S&P Global's recent report. Although the industry still faced challenges, there were indications of improved stability. While output, new orders, and employment continued to decline, the rate of decrease slowed, and business confidence saw an uptick.

Vietnam's manufacturing PMI shows signs of stability despite ongoing decline

According to S&P Global's report, In July, Vietnam's manufacturing PMI rose to 48.7 points from June's 46.2 points. Output, new orders, and employment experienced slower declines, accompanied by a boost in business confidence. However, the report noted an increase in inventories of unsold products and unused inputs due to the challenging business environment. Price and delivery time declines persisted.

New export orders notably decreased, with European customers reporting reduced demand. Companies continued to cut output as new orders declined.

The weaker commodity demand contributed to unexpected inventory increases in both finished and input goods, indicating difficulties in sales. Despite the decline in purchasing activity for the fifth month in a row, purchases' inventories rose.

Manufacturers reduced employment for the fifth consecutive month. The decreased input demand significantly shortened supplier delivery times, with reduced transportation disruption aiding the process.

Business confidence improved slightly over the past four months but remained relatively low. Companies hoped for a rebound in demand to drive output growth, yet concerns persisted regarding new order acquisition.

Chief Economist Andrew Harker from S&P Global Market Intelligence commented on the results, stating that while Vietnam's manufacturing industry faced ongoing pressure in July, signs of stabilization were present. New orders declining at a slower pace indicated potential demand stabilization, providing optimism for a future rebound in output.

Congthuong/ Translator: Ngoc Mai
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