The Purchasing Managers’ Index™ (PMI™) of Vietnam showed signs of strengthening during December, 2014, recording 52.7, up from 52.1 in November and the highest reading since April.

Growth has now been registered for 16 months in a row. The upturn in operating conditions stemmed primarily from strengthened growth in output and new orders.

Trinh Nguyen, Asia Economist at HSBC said that the demand for Vietnamese goods rose, both externally and domestically.

December’s survey showed a second successive monthly increase in inventories of input purchases, while there was also an increase in stocks of finished goods.

Companies reported that delays in the delivery of completed goods led to a build-up of stock in warehouses.

The survey data also indicated that average input costs paid by Vietnamese manufacturers continued to fall.

Companies reported that supplier prices, shipping costs and the price of fuel had all fallen when compared to November. Latest data showed that average input prices declined to the greatest degree since July 2012.

Faced with a reduction in their input costs, manufacturers chose to lower their average prices charged in December.

Competitive pressures and efforts to stimulate demand also led to the sharpest fall in output charges for a year -and-a-half.

Commenting on the Vietnam Manufacturing PMI™ survey, Nguyen said Vietnam's acceleration of manufacturing activity stands in sharp contrast to decelerating momentum elsewhere.

She also believed that the manufacturing sector will benefit from both wage cost competitiveness and lower input prices, thanks to declining global brent costs.-VNA