The S&P Global Vietnam Purchasing Managers’ Index has recorded a 2.3 point fall in August, from 54.7 in July to 52.4 a month later, according to a press release from the firm. This does, however, signal the continued expansion of Vietnam’s manufacturing sector for the fifth month in a row.
Key findings from the survey include:
- Customer demand has been rising with price stability helping to secure new orders;
- Input costs and selling prices continued to increase but inflation cooled;
- Lower oil prices reduced shipping costs;
- Purchasing activity increased at its fastest pace since May 2022;
- There was a fall in employment with some temporary contracts coming to an end;
- Backlogs continued to grow for the third month in a row on account of the reduced size of the workforce; and
- Sentiment dropped among survey respondents but was still overall optimistic.
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.