S&P Global Vietnam Manufacturing PMI hit 50.3 points in January suggesting a slight recovery for the sector–on the index 50 represents break-even with anything lower signalling a contraction and anything above signalling growth.
Key takeaways
- The return to growth is only tentative with employment and purchasing fractionally lower and business confidence waning;
- Red Sea shipping delays extended delivery times and added to cost pressures; however,
- Prices were lowered to try and boost demand.
- This was the first rise in five months.
- Export order increased for the first time since October; however,
- Business confidence in the year ahead for the the sector hit a seven month low.
Full report: S&P Global Vietnam Manufacturing PMI
It’s also worth noting that in the lead up to the Lunar New Year consumption typically peaks and at least some of this perceived growth may reflect this reality.
Likewise, the five-day break for the Lunar New Year should also see actua outputs fall in February.
Also, with respect to the local economy, the fall in employment in the manufacturing sector, though only marginal, suggests there may still be excess capacity with current staffing numbers.