Vietnam maintained its lead in the ASEAN PMI rankings (Source: VNA)Hanoi (VNS/VNA) -Vietnam maintained its lead in the ASEAN Manufacturing Purchasing Managers’Index (PMI) rankings, registering another solid improvement in its goods-producingsector in July, the latest survey from Nikkei’s IHSMarkit revealed on August 1.
According to the survey, Vietnam’s PMI – a composite single-figure indicator ofmanufacturing performance – was 54.9 in July, down marginally from 55.7 in Junebut still one of the highest since the survey began in March 2011. Businessconditions have now strengthened in each of the past 32 months.
“The Vietnam manufacturing PMI remained elevated in July as the sectorcontinued to grow strongly. Supporting the overall expansion in the latestsurvey period was an accelerated increase of new export orders. Confidence inthe future was meanwhile illustrated by efforts by firms to build inventoryreserves in order to prepare for further production growth and further solidhiring,” Andrew Harker, Associate Director at IHS Markit, which compiles thesurvey, said.
The survey showed that new manufacturing orders continued to increase at asubstantial pace in July, with the rate of growth only fractionally weaker thanJune’s 87-month high. Respondents indicated that the rise in new business wasin line with stronger client demand.
Meanwhile, the rate of growth in new export orders quickened in July and wasonly slightly slower than May’s series record.
Firms responded to new orders by increasing output again in the latest surveyperiod. The rate of expansion remained sharp, despite easing from the previousmonth. All three broad sectors saw output increase, led by intermediate goods.
The strong increase in output was sufficient to reduce backlogs of work for thesecond month running in July, albeit marginally.
“Higher workloads encouraged manufacturers to increase their staffing levelsand purchasing activity during July. The rate of job creation was solid,despite easing from June’s record high.
Meanwhile, input buying rose at a substantial pace amid some reports of effortsto build inventory reserves,” Nikkei said.
Stocks of both purchases and finished goods increased. The rate of accumulationof preproduction inventories accelerated to a five-month high, while stocks offinished goods increased modestly in July following a fall in June.
The rate of input cost inflation remained elevated at the start of Q3, withpanellists linking higher prices to raw material shortages. The passing on ofincreased input costs to customers resulted in a further monthly rise in outputprices, with the rate of inflation little-changed from that seen in June.
Suppliers’ delivery times were unchanged in July, thereby ending a 17-monthperiod of lengthening lead times. Raw material shortages reportedly led todelays, but this was counteracted by a willingness by suppliers to respond torequests for quicker deliveries.
Forecasts of further growth of new business over the next 12 months fuelledoptimism that output will continue to rise. Business confidence picked up fromthe previous month, with close to 51 percent of respondents predicting anincrease in production.-VNS/VNA
VNA
