The S&P Global Vietnam Manufacturing Purchasing Managers’ Index recorded a decline in December to 49.8 down from 50.8 in November, according to a press release from the firm.
Key takeaways include:
- The sector lost momentum on the back of slower growth in production and new orders.
- Firms scaled back employment and inventories, though purchasing activity increased.
- Business confidence dropped to a 19-month low due to global market uncertainty and instability.
- Inflationary pressures rose sharply, with input costs and output prices increasing at the fastest rates since July.
- New export orders declined for the second month in a row, though total new business increased slightly.
- Job cuts were at their sharpest pace since August.
- Backlogs of work rose, though the increase was marginal.
- Firms reduced stocks of finished goods and purchases.
- Suppliers’ delivery times lengthened fon the back of slow traffic, but delays were modest.
- Rising input costs were linked to material shortages and exchange rate fluctuations, particularly for oil and metals.
- Companies raised output prices for the eighth month in a row.
- The subdued sector performance reflected concerns over US tariff policies, with clarity expected in the new year.
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: Ultimate Guide