AsemconnectVietnam - Vietnam's manufacturing Purchasing Managers' Index (PMI) rose to 51.2 in October, providing impetus for industrial production in the final months of the year.

PMI exceeded 51 points
According to S&P Global, the Vietnam Manufacturing Purchasing Managers' Index (PMI) rose sharply to 51.2 points in October, surpassing the 50-point mark after suffering disruptions caused by Typhoon Yagi in September of 2024. Business conditions have strengthened in 6 of the past 7 months.
In September of this year, Typhoon Yagi severely impacted Vietnam's manufacturing sector with heavy rains and floods leading to temporary business closures and delays in production lines and supply chains. Vietnam’s manufacturing PMI fell from 52.4 in August to 47.3 in September.
However, in October, Vietnam’s manufacturing sector began to recover, with both output and new orders increasing again. However, the rate of increase in each of these indicators was slower than in the months before September as some companies continued to face disruptions after the storm.
Although export orders increased slightly, international demand showed signs of weakening, and manufacturers used inventories to meet orders, leading to a reduction in finished goods inventories. The labor market showed signs of slowing down as some companies cut staff.
Many businesses increased their use of inventories to meet production, but the rate of inventory reduction slowed compared to the previous quarter. In addition, due to higher prices for raw materials, fuel and transport services, businesses had to adjust their selling prices to compensate for costs.
However, suppliers' delivery times lengthened for the second consecutive month in October as storm disruptions continued to affect transportation. However, the lengthening was less severe than in September.
Purchasing activity picked up again amid rising new orders and expected output increases in the coming months.
According to S&P Global, although rising sales and business expansion plans have raised positive expectations for production next year, uncertainty about the global political situation, especially the US election, has dampened business confidence.
Mr. Andrew Harker - Chief Economist at S&P Global Market Intelligence - commented: "October data shows a recovery thanks to rising new orders and businesses expanding production. However, some companies are still affected by the storm, thereby limiting growth rates."
More effective "replenishing" solutions for the last months of the year
Economic experts say that currently, the world economic outlook is brighter, demand has returned. Many domestic enterprises have recently taken advantage of the Government's support policies to invest in technology and restructure enterprises. Therefore, production is gradually improving, enterprises are taking advantage of opportunities, and have more new orders.
To stimulate consumption, according to Mr. Tran Quoc Hung, former Executive Director of the Institute of International Finance (IIF), strong measures are needed to accelerate the disbursement of public investment capital, thereby stimulating demand and building infrastructure to serve production. In addition, it is necessary to cut direct and indirect taxes as well as public fees to increase household purchasing power, increasing total domestic consumption demand.
In the coming time, especially in the last months of the year, to Industrial production continues to recover and is the driving force for economic growth, it is necessary to implement a number of solutions to support industrial production to overcome difficulties. Specifically for processing and manufacturing industries, the most pressing problem is to reduce the rate of scrap and increase the rate of finished products, which means reducing the costs of recycling and remanufacturing, as well as reducing the rate of waste in the production process. Solving this problem, businesses will improve their capacity and production efficiency.
The Ministry of Industry and Trade also proposed a solution, in the coming time the Ministry will continue to remove difficulties for businesses to promote production development on the basis of closely following the production situation of industries, fields, and some key industrial localities, promptly grasping and removing difficulties to promote production development. At the same time, the Ministry will promote the organization of connections for domestic enterprises to participate in the supply chain of large global FDI enterprises investing in Vietnam.
The Department of Industry (under the Ministry of Industry and Trade) will continue to proactively and effectively implement the business support policies approved by the Government to remove difficulties and obstacles in production and business activities of enterprises; promote the operation of new industrial production projects to serve export and domestic consumption, creating more capacity for production development and goods sources for export.
At the same time, support businesses to continue taking advantage of opportunities from large public investment projects and the Government's real estate market recovery policies; encourage increased purchases of domestically produced goods, minimize the use of imported products and raw materials that have been domestically produced; promote the search for new markets for key export industries such as textiles, footwear, electronics, etc.
CK
Source: VITIC/congthuong.vn