Vietnam’s manufacturing sector showed signs of revival in August, registering growth for the first time in six months. The country’s manufacturing purchasing managers’ index (PMI) moved up to 50.5, compared to 48.7 in July, indicating a marginal uptick in business conditions.
The growth was spurred by a modest increase in new orders and production, signalling a tentative recovery in demand. Export business also saw growth after a five-month decline. Despite the positive indicators, employment numbers continued to drop as companies remained cautious due to the volatility of demand. This marked the sixth consecutive month of a reduction in workforce numbers, although the pace of decline was marginal, S&P Global said in a press release.
August also saw the end of a three-month decline in input prices. As a result, firms slightly raised their selling prices for the first time since March. On the supply chain side, suppliers’ delivery times have shortened for the eighth month in a row, demonstrating a resilient vendor performance despite increasing demand.
Moreover, companies expanded their purchasing activity at a robust pace, the first increase seen in this area in six months. This led to an increase in stocks of purchases for the second consecutive month.
Though optimism about the 12-month production outlook reached a five-month high, it still remains below the series average, reflecting ongoing concerns over demand strength. Overall, the data suggested that Vietnam’s manufacturing sector is on a path to recovery, albeit cautiously amid lingering uncertainties.