AsemconnectVietnam - Vietnam's manufacturing sector reached 52.4 points in August, down from 54.7 points in July but still showing strong improvement.

PMI increased to 54.7 points, Vietnam's manufacturing sector improved stronglyJuly: Vietnam's manufacturing PMI increased sharply
S&P Global recently released the Vietnam Manufacturing Purchasing Managers' Index (PMI) report. There were 3 highlights: output and new orders continued to increase significantly; inflationary pressures eased and employment decreased for the first time in three months.
S&P Global assessed that Vietnamese manufacturers continued to have increased output and new orders in the middle of the third quarter. While growth in each of these indicators slowed from July’s near-record levels, the pace of expansion was still strong and led to the largest increase in purchasing activity in more than two years.
On a less positive note, however, employment fell for the first time in three months. While both input costs and output prices continued to rise in August, reports of competitive pressures showed that the rate of price and cost increases slowed markedly during the month.
The improvement in the health of the manufacturing sector saw output and new orders rise further, and the respective rates of expansion remained rapid although they had slowed from the exceptionally high rates recorded in June and July.
Improved customer demand led to a rise in new orders, and firms increased output accordingly. In some cases, relative price stability helped firms secure new orders, while there were also reports of improving international demand. New export orders rose for the fifth month running.
The report said that relative price stability was also reflected in input cost and selling price data. While both continued to rise, the rate of increase slowed markedly from July and was the weakest in four months.
Some manufacturers reported rising raw material prices, but the pace of price increases slowed amid competitive pressures. Meanwhile, lower oil prices reduced transport costs in some cases.
A strong increase in new orders and easing cost pressures led manufacturers to increase purchasing activity sharply in August. Notably, the rate of increase accelerated for the fourth consecutive month and was the fastest since May of 2022.
In a further positive development, purchased inputs were often used directly in production, resulting in further declines in inventories of purchases. Finished goods inventories also fell as stocks of finished products were transferred to customers to meet orders.
In contrast to purchasing activity, manufacturers reduced employment for the first time in three months amid layoffs and temporary terminations. The reduction in the workforce came at a time of rising new orders, causing backlogs to rise further in August.
Suppliers’ delivery times shortened for the third month running, although the reduction was small amid some reports of delays in international shipments. Manufacturers remain optimistic that output will increase next year, with expectations of continued improvement in customer demand and rising new orders.
Commenting on Vietnam's manufacturing sector in August, Andrew Harker, Chief Economist at S&P Global Market Intelligence, said: "As expected, output and new orders in the Vietnamese manufacturing sector slowed from the exceptionally high levels recorded in June and July. These increases are always difficult to sustain, and the pace of growth remains substantial, so there is little cause for concern on this front."
The expert pointed out that the positive point lies in the inflation-related factor when both input costs and output prices increased much less in August. In fact, this is considered a factor contributing to the growth in new orders.
"Overall, the manufacturing sector continues to have a good second half of the year so far, with much to be done in the coming months," said the Chief Economist at S&P Global Market Intelligence.
CK
Source: VITIC/congthuong.vn