The Hong Kong and Shanghai Banking Corporation (HSBC) released its Vietnam Manufacturing PMI (Purchasing Managers’ Index) in January, 2013, which showed that Vietnam’s economy is recovering despite many difficulties in the coming time.

The index rose to 50.1 in January, up from 49.3 in December, 2012, meaning manufacturing production increased for the third successive month. Companies benefited from a slight increase in new orders from the domestic market.

However, demand from overseas remained weak, leading to a fall in new export orders. Vietnamese manufacturers reported declining new orders from the Eurozone and China.

Vietnam’s manufacturing sector saw marginal job growth in January. There was also a solid increase in average input price, a significant turnaround from the previous month.

On the other hand, Vietnamese manufacturers still want to reduce their stock level in January, which is reflected in the continuous decline in stockpiled raw materials and finished goods. The decline in stored finished products was the deepest in the past 22 months. Purchasing power also rose for the second time in the last three months.

Trinh Nguyen, an economist at HSBC, hoped that Vietnam’s economy will continue to recover in 2013, with superior growth to 2012. However, he warned that the recovery process is still fragile as there is economic restructuring in progress. The rising price of goods and inflation is another challenge.-VNA