The S&P Global Vietnam Purchasing Managers’ Index has recorded a 5.1 point fall in September, from 52.4 in August to 47.3 a month later, according to a press release from the firm. This moved the index below the 50-point break even mark which means that Vietnam’s manufacturing industry, according to the index, contracted in September.
Key findings from the survey include:
- Typhoon Yagi caused a reduction in manufacturing production in September.
- New export orders dipped, but the contraction was marginal and weaker compared to total new business, with international demand remaining relatively strong.
- Firms scaled back purchasing activity.
- Manufacturers who made purchases faced longer supplier delivery times due to flooding, leading to a rapid decrease in purchase stocks.
- Stocks of finished goods also declined in September.
- Outstanding business saw its sharpest rise in two-and-a-half years.
- Sentiment improved to a three-month high, with firms confident in strengthening demand.
- Positive expectations and increased new orders in previous months led to slight staffing expansions in September.
- Employment has increased in three of the past four months.
- Some firms raised prices due to higher input costs, while others offered discounts due to muted cost inflation.
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