Vietnam’s manufacturing sector maintained growth in June amid further improvements in new orders and an easing of inflationary pressures, S&P Global said.
Purchasing activity also rose again in the month, but continued supply-chain delays meant stocks of inputs fell sharply.
New export orders rose slightly.
Business sentiment in June remained below the level seen prior to the outbreak of the Iran war.
Staffing levels were also down amid ongoing evidence of spare capacity in the sector.
The S&P Global Vietnam manufacturing purchasing managers’ index (PMI) posted 51.8 in June, down from 52.8 in May but still above the 50 no-change mark, and therefore, pointing to an improvement in the health of the sector.
Business conditions have now strengthened on a monthly basis throughout the past year.
After returning to growth in May, new orders increased again in June as panellists reported improvements in customer demand. The latest expansion was solid, albeit softer than in the previous survey period.
New export orders also rose, albeit only slightly and to a smaller extent than total new business. This rise helped support sustained growth of manufacturing production.
Output rose for the fourteenth successive month, and at a marked pace that was the fastest since February.
Higher new orders and rising output requirements encouraged manufacturers to expand their purchasing activity for the second month running in June, a press release from S&P Global said.
Despite another marked rise in purchasing, stocks of inputs decreased at a sharp and accelerated pace in June. In fact, the fall was the most marked for a year.
Sourcing inputs in general proved difficult for firms as suppliers’ delivery times lengthened further. The latest deterioration in vendor performance was only modest and the least marked in four months.
Input costs continued to rise sharply in June, but the rate of inflation was much softer than that seen in May and the lowest since the start of the year.
Contrasting with the generally positive picture in June, employment continued to decrease, the fourth month running in which this has been the case.
Business sentiment in the sector in June remained below the level seen prior to the outbreak of war in the Middle East.
Fibre2Fashion News Desk (DS)
