Workers at a manufacturing chain inside an LG Electronics Vietnam’s production plant in Hai Phong (Photo: VNA) Hanoi (VNA) - The VietnamManufacturing Purchasing Managers’ Index (PMI) rose in September,with faster rises in output, new orders and employment on the back of strongercustomer demand.
This was revealed on October 2 by the latest survey from Nikkei’s IHSMarkit.
The composite indicator of manufacturing performance stood at 53.3 inSeptember, up from 51.8 in August. The reading signalled a solid monthlystrengthening of business conditions, with the rate of improvement the mostmarked since April. The health of the sector has now strengthened in 22 consecutivemonths.
“The anecdotal evidence has highlighted an improvement in customerdemand over the month. This resulted in a sharp and accelerated increase in newbusiness, the most marked in five months. The rate of expansion in new exportorders also quickened in September,” the Nikkei’s IHS Markit reported.
The manufacturing output increased for the 11th successive month,with the latest rise the most marked since April. All three broad sectorssaw a production increase, led by consumer goods firms.
Higher new orders contributed to capacity pressures, as signalled by a furtherrise in backlogs of work. Some panellists also mentioned that staff shortagescontributed to the build-up of outstanding business.
Firms responded to greater workloads by increasing their staffing levels.Moreover, the rate of job creation quickened to a six-month high, according tothe report.
Manufacturers also used inventories to help fulfill new orders in September. Asa result, the stocks of finished goods decreased for the third monthrunning, and to the greatest extent since July 2016.
꧟[GSO: Vietnam’s GDP expands 6.41 pct in nine months]
“A marked acceleration in the rate of input cost inflation was recorded, linkedto higher prices for raw materials, including those sourced from China. Theincrease in input costs was the strongest since May 2011. Rising input pricesled firms to increase their output charges in September for the first time infive months. That said, the rate of inflation was modest amid reports ofcompetitive pressures,” the report showed.
Higher new orders, and a subsequent rise in production requirements, encouragedfirms to increase their purchasing activity at the end of the third quarter.The rate of expansion was solid, and the fastest since April. Stocks ofpurchases also rose, partly reflective of efforts to build inventory reserves,it added.
Suppliers’ delivery times continued to lengthen, albeit to the least extent inthe current eight-month sequence of longer lead times.
Finally, manufacturers remained optimistic that the output would increaseover the coming year, with positive sentiment linked to predictionsof a new growth order and business expansion plans.
"New orders rose markedly, feeding through to faster expansion of output,employment and purchasing activity. Manufacturers are, therefore, well placedto record further growth during the final quarter," said Andrew Harker,associate director at IHS Markit.
"A cautionary note, though, is signalled by the re-emergence ofinflationary pressures. Cost inflation was the strongest in over six years amidpressure on the supply of raw materials," he added.-VNA
“A marked acceleration in the rate of input cost inflation was recorded, linkedto higher prices for raw materials, including those sourced from China. Theincrease in input costs was the strongest since May 2011. Rising input pricesled firms to increase their output charges in September for the first time infive months. That said, the rate of inflation was modest amid reports ofcompetitive pressures,” the report showed.
Higher new orders, and a subsequent rise in production requirements, encouragedfirms to increase their purchasing activity at the end of the third quarter.The rate of expansion was solid, and the fastest since April. Stocks ofpurchases also rose, partly reflective of efforts to build inventory reserves,it added.
Suppliers’ delivery times continued to lengthen, albeit to the least extent inthe current eight-month sequence of longer lead times.
Finally, manufacturers remained optimistic that the output would increaseover the coming year, with positive sentiment linked to predictionsof a new growth order and business expansion plans.
"New orders rose markedly, feeding through to faster expansion of output,employment and purchasing activity. Manufacturers are, therefore, well placedto record further growth during the final quarter," said Andrew Harker,associate director at IHS Markit.
"A cautionary note, though, is signalled by the re-emergence ofinflationary pressures. Cost inflation was the strongest in over six years amidpressure on the supply of raw materials," he added.-VNA
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