S&P Global’s Vietnam Purchasing Managers’ Index jumped to 54.7 in June up from 50.3 a month earlier. This is on the back of a sharp rise in new orders that S&P says experienced the highest growth since the index began, aside from the very first month it went online. Note that, the index is out of 100 with 50 being break-even and anything below that signalling a contraction with anything above signalling an expansion.
Key takeaways:
- New orders rose at one of the fastest rates on record.
- Backlogs increased.
- Workforce numbers increased.
- Purchasing activity increased but input stocks fell.
- Inventories of finished goods also decreased.
- Input cost inflation was up on higher oil and transports costs.
- Selling prices experienced their biggest increase since June 2022.
- Access to raw materials improved and this saw lead times come down.
Of note, whereas this is good news for the manufacturing industry and Vietnam’s economy more broadly, as the import of raw materials increases it is likely more US dollars will be needed. This means increasing pressure on the local currency which is already strained.
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