Manufacturing industry recovers
(VOV) -HSBC’s seasonally adjusted reading of Vietnam’s manufacturing PMI has exceeded the neutral 50.0 value for the first time in 14 months, rising from October’s 48.7 to 50.5 in November.
The rebound in manufacturing activity is anticipated and much-needed, which is supported by stronger credit growth as well as relatively benign inflation in conjunction with weak export demand, said Trinh Nguyen, Asia Economist at HSBC.
“Looking ahead, we expect a gradual pick-up of economic activity supported by both domestic demand and a gradual recovery in China,” she said.
The survey shows that improvements in operating conditions reflected November’s returns to positive trends in both production levels and new orders. Output increased at its most marked pace since September 2011, thereby ending a seven-month period of contraction.
Although the latest rise in new orders was only modest, the rate of expansion was still the strongest since April 2011. Work backlogs also decreased for the eighth consecutive month, suggesting a general easing of pressure on operating capacity across the Vietnamese manufacturing sector.
Another staffing level increase contributed to the latest reduction in the sector’s work outstanding. The pace of job creation picked up slightly from October and reached its highest in a year.
Price discounting strategies supported new business gains in the Vietnamese manufacturing sector. Factory gate prices decreased for the seventh month running and by the greatest extent since August. Average cost burdens continued to rise during November—driven by rising oil-related prices—but the cost burdens’ inflation rate ebbed back further from September’s five-month high.