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PMI in May of 2024: Vietnam's manufacturing industry improved slightly 

 Tuesday, June 18,2024

AsemconnectVietnam - Vietnam's manufacturing sector was unchanged at 50.3 in May, showing that the industry's business conditions improved slightly for the second consecutive month.

On June 3, 2024 S&P Global announced the Vietnam Manufacturing Industry Purchasing Managers' Index (PMI) report for May of 2024. There were 3 outstanding highlights: manufacturing output increased for the second consecutive month; employment continued to decline; input costs increased at a nearly two-year high.
Many industrial manufacturing enterprises are taking advantage of the golden time in the last months of the year, focusing all resources to speed up production.
Vietnam's manufacturing sector was unchanged at 50.3 in May, showing that the industry's business conditions improved slightly for the second consecutive month.
The report said that the growth momentum of Vietnam's manufacturing industry slowed down in May. The number of new orders continued to increase sharply, causing output to increase faster. Companies also increased purchasing activity, but employment fell for a second straight month with layoffs and extended employee absences.
Meanwhile, the growth rate of input costs increased significantly faster during the month. Faced with that situation, manufacturers increased their selling prices for the first time since February.
New orders continued to rise strongly in May as stronger demand helped companies attract new customers and new orders. However, the growth rate was a bit slower than in April.
Meanwhile, the number of new export orders also increased, although the level of increase was lower than the total number of new orders. The increase in total new orders encouraged manufacturers to raise output for the second consecutive month. Furthermore, the growth rate has accelerated and become the fastest since September of 2022.
Despite increases in new orders and output, manufacturers saw employment fell for the second straight month at the midpoint of the second quarter. According to survey participants, employee turnover and prolonged absence are the cause of the decline in employment, with this decrease being the sharpest and most significant in nearly a year.
Companies that bought input goods during the month faced sharp price increases. In fact, the pace of price growth has been significantly faster and was the fastest since June of 2022. Some survey respondents said the weak currency had contributed to rising raw material prices, while some reported rising oil and fuel prices. About a quarter of respondents said input costs increased, while 5% said they decreased.
A sharp increase in input costs has caused selling prices to increase and this was the first increase in three months. This price increase rate was one of the two fastest in 15 months, on par with the level recorded in October of 2023.
Commenting on the survey results, Mr. Andrew Harker, Economic Director at S&P Global Market Intelligence, said that S&P Global's Vietnam manufacturing PMI data is inconsistent. On the positive side, the number of new orders continued to increase strongly as there were signs that demand maintained an increase, thereby causing output to increase stronger in May.
On the other side, there are concerns about employment numbers and inflationary pressures. Employment continues to decline sharply, which may limit companies' production capacity. Meanwhile, the cost growth rate is the fastest in nearly two years, thereby causing output prices to increase. This may have a limiting effect on demand in the coming months.
CK
Source: VITIC/ haiquanonline.com.vn

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