Illustrative image (Photo: VNA) S&P Global said the Vietnam Manufacturing Purchasing Managers'Index (PMI) remained above the 50.0 no-change mark for the tenth successivemonth in July, signalling a further strengthening of business conditions. Thatsaid, at 51.2, down from 54.0 in June, the index signalled a softerimprovement.
As such, output, new orders and employment all increased at weakerrates than in June. New orders increased for the 10th month running,but the rate of expansion eased to the weakest since April. New export businessrose solidly, meanwhile, and at a faster pace than total new orders.
The continued growth of new orders encouraged manufacturers tokeep expanding production in July. Output rose for the fourth successive month.That said, the rate of expansion was only marginal and the softest in thecurrent sequence of growth amid signs of demand softening, shippingdifficulties and price pressures.
There were signs, however, of price and supply pressures easing atthe start of the third quarter.
On prices, according to the survey, the rate of input costinflation slowed sharply and was the weakest since October 2020 as the pricesof some inputs fell on global markets. That said, the latest rise was stillabove the series average amid reports of higher costs for oil, gas and freight.Similarly, output prices continued to rise, but the rate of inflation slowedand was only modest.
Suppliers' delivery times neared stabilisation as the rate of leadtime lengthening softened for the second month running to the weakest in 22months. Where delays continued, this was linked to issues with shipping andrising transportation costs.
Manufacturers continued to expand their workforce numbers in linewith higher output requirements, the fourth month running in which this hasbeen the case. The rate of job creation was solid despite slowing from thethree-and-a-half year high posted in June. Meanwhile, backlogs of work wereunchanged following a decrease in the previous month.
As well as taking on extra staff, firms also expanded theirpurchasing activity in July, due to rising new orders and efforts to buildinventory reserves. Any attempts to accumulate stocks of purchases were in vainas preproduction inventories decreased at the sharpest pace in just over ayear.
Stocks of finished goods also decreased, falling for the fifthmonth running and at a faster pace than in June. Some firms lowered inventoriesin response to slower new order growth, while others had found it easier todispatch products for export.
Manufacturers remained optimistic that production will increaseover the coming 12 months. Positive sentiment reflected hopes for furtherimprovements in customer demand, stable market conditions, new productdevelopment and business investment. Close to 58% of respondents wereoptimistic about the outlook, while 11% were pessimistic./.
VNA
