Business conditions in Vietnam continued to improve towards the end of Q1 / 2018, although the growth rate slowed down compared to February.
Production and employment increased only modestly during the month, while the number of new orders continued to increase thanks to increased exports. Input cost growth slowed down with output prices also slower in March. Nikkei’s Purchasing Managers’ Index (PMI) for the entire Vietnamese manufacturing sector – one only The manufacturing sector’s aggregate performance measures – fell to 51.6 points in March from 53.5 points in February which was once a 10-month high. The index results show that the health of the manufacturing sector has improved moderately, and this is the weakest improvement since November last year. Business conditions have improved over the past 28 months.
Survey data in March showed that manufacturing output rose slightly, and is one of the slowest in a period of four-month growth currently. In places where the output increases, the main reason is the increase in new orders. The growth rate of new orders has slowed down, but remains strong as reports show that customer demand has improved. The total number of new orders increased due to the faster increase in new orders from abroad, and this is the most significant increase since October last year.
The slower increase in new orders helped companies deal with the unrealized workload in March. The pace of decline increased to its strongest level in three years. Manufacturers have increased the number of jobs for 24 consecutive months to meet the demand for increased output. However, the job creation rate slowed to a seven-month low. Although input prices continued to increase sharply in March, the rate of price growth has slowed down significantly compared to February and is the slowest since August 2017. Where input costs increased, the cause was attributed to increased market prices.
Output prices also slowed down due to competitive pressure. Sales prices have increased during the past seven months. The supplier’s delivery time has been slightly extended, and the cause is attributed to shortages in raw materials and delay in shipping. Consistent with the state of output and new orders, purchasing grew weaker in March. However, the increase remained strong and extended the current growth period to 28 months.
Inventory is almost stable during the month. Inventories of purchased goods only changed slightly after three months of increase, while inventories of finished products remained stable after eight months of decline. Survey team members said slower growth in new orders and volumes led to cautious stockpiling. Producers have been very optimistic that output will increase next year, with optimism rebounding after reaching an eight-month low in February. More than 55% of survey respondents forecast real estate. quantity will increase.
Commenting on Vietnam’s manufacturing PMI survey data, Andrew Harker, Vice President at IHS Markit, the company that collects the survey results, said: “Despite still growing in March, the manufacturing sector Vietnam has weaker growth indicators, especially in terms of output. The number of new orders continued to increase strongly thanks to the export sector, which in turn led to optimism about the prospect of increasing output in the near future. Companies are also less worried about inflation as input costs rise much more slowly than in February. Hence, inflationary pressure seems to have peaked at the transition point between the old and the new year. .
* Source: Investment bridge