The S&P Global Vietnam Manufacturing Purchasing Managers’ Index recorded a fall in November over October, from 51.2 points to 50.8, according to a press release from the firm. This is still above the 50-point no-change point signalling the sector is still in an expansionary phase.
Key points of note:
- Slower increases in output and new orders were recorded, impacted by export weakness.
- Employment continued to decline due to cost-cutting measures, leading to a build-up of unfinished work for the sixth consecutive month, though at a slower pace.
- Input costs increased modestly, linked to supply shortages and currency weakness, while output prices rose slightly.
- Manufacturing output rose for the second month but at a slower pace; demand was muted despite higher new orders from some firms.
- New export orders fell sharply, the steepest drop since July 2023, countering gains in domestic orders.
- Supplier delivery times lengthened for the third consecutive month, with transportation issues and raw material shortages cited.
- Purchasing activity dropped, leading to lower input stocks and significant depletion of finished goods inventories, the steepest since July.
- Business confidence dipped to its lowest level since January but remained optimistic due to plans for product launches, expansions, and anticipated order increases.
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