AsemconnectVietnam - In July, the PMI remained at a high level of 54.7 points, the same as in June, thanks to a strong increase in new orders, causing manufacturers to increase production.

On the morning of August 1, 2024, S&P Global released the Vietnam Manufacturing PMI report for July of 2024, with 3 highlights: output increased at the fastest rate since March 2011; purchasing activities and employment increased, and finished goods inventories decreased to near record levels.
The strong growth of Vietnam's manufacturing industry in June continued in July. The number of new orders continued to increase strongly, causing manufacturers to increase production, and the growth rate was nearly as fast as a record high.
However, new orders rose so strongly that firms used up finished goods inventories at one of the highest levels on record, despite efforts to boost employment and input purchases. Meanwhile, input costs and output prices continued to rise markedly, and inflation eased slightly from June.
The last time the PMI posted a reading higher than 54.7 was November 2018, S&P Global said. Significant improvements were recorded across all consumer, intermediate and capital goods sectors. New orders rose for the fourth month in a row in July, and the pace of growth was only slightly slower than June’s near-record pace.
Panelists attributed the increase of new orders to stronger market demand and increased customer numbers. New export orders also increased, although at a weaker pace than total new orders. Some firms said that export demand was affected by high shipping costs.
The industrial production has recovered strongly in the first quarter of 2024, with the target of IIP growth of 7-8% in 2024, the Ministry of Industry and Trade and localities have been taking drastic measures.
In the context of the strong increase in new orders, manufacturers increased production sharply in July. Moreover, the rate of output growth was faster than in June and was the second fastest recorded, after the first month of data collection in March of 2011. Despite the strong increase in output, firms continued to use existing inventories to meet new orders.
In fact, finished goods inventories fell to their second-lowest level on record, behind only February of 2014.
Firms attempted to increase capacity by increasing both purchasing and employment at the start of the third quarter. Input purchases increased significantly and at the fastest pace since May of 2022. On the other hand, staffing levels rose only marginally and at a slower pace than in June. Meanwhile, backlogs of work increased for the second month running.
Commenting on Vietnam's July PMI, Andrew Harker, Chief Economist at S&P Global Market Intelligence, said that the fact that Vietnam's manufacturing sector was able to continue its strong growth momentum from June into July adds to optimism that we are starting a period of good growth that will help push the economy forward.
CK
Source: VITIC/congthuong.vn