The S&P Global Vietnam Manufacturing Purchasing Managers’ Index reached 51.2 in October up from 47.3 in September, according to a press release from S&P. Above the 50 point break-even mark, this would indicate the manufacturing industry is expanding once more after a sharp fall in September.
Key takeaways:
- Some firms continued to face disruptions left over from Typhoon Yagi and the flooding that came with it.
- Exports orders were up but only slightly with reports that international demand was subdued.
- Backlogs of orders continued to rise.
- Inventories of completed goods continued to decrease.
- Employment fell.
- Input costs were reportedly up on a weaker dong and rising prices for oil, metal, and transport. This led to an increase in selling prices but this was limited by competitive pressure.
- Optimism was at a nine-month low with some firms suggesting confidence had been hit by uncertainty around the US election.
The S&P Global Vietnam Purchasing Managers’ Index is a key economic indicator that reflects the performance and health of Vietnam’s manufacturing sector. The PMI is derived from monthly surveys of private sector companies, covering various aspects of the manufacturing process, such as new orders, production, employment, supplier delivery times, and inventory levels.
The PMI is an index number ranging from 0 to 100. A PMI above 50 indicates expansion in the manufacturing sector compared to the previous month, while a reading below 50 suggests contraction. A reading of 50 indicates no change. The PMI is based on responses from purchasing managers in a panel of around 400 manufacturing companies in Vietnam. These managers are asked about various aspects of their operations compared to the previous month.
See also: Manufacturing in Vietnam