Record output growth and new orders behind healthy rise in Purchasing Managers Index.
The Purchasing Managers Index (PMI) rose from 53.5 in April to 54.8 in May, HSBC has reported.
Growth in Vietnam’s manufacturing sector gathered pace in May, with rising client demand leading to record growth in output and new orders. The rate of job creation also picked up pace during the month, HSBC added. Meanwhile, input costs increased for the first time in seven months but companies continued to lower their output prices.
The monthly growth was the strongest since April 2011. “Central to the marked strengthening of the sector’s health was a record increase in new business,” the report said. The increase mainly reflected a greater need for products among customers. New export orders also rose, but at much weaker pace than seen for total new business.
Input costs at Vietnamese manufacturing enterprises rose in May after having fallen in the previous six months. Higher oil and electricity prices, as well as a weakening of the VND against the US dollar, were also factors leading to higher input costs.
The inflation rate was relatively modest and enterprises continued to lower their output prices amid competitive pressure. Output prices have now fallen in each of the past eight months, according to HSBC.
A composite indicator, the PMI provides a single figure snapshot of operating conditions in the manufacturing economy, based on data compiled from monthly replies to questionnaires sent to purchasing executives at 400 manufacturing enterprises.