The manufacturing sector of Vietnam edged back into expansion in March, with the PMI posting a 23-month high of 5.08.
The figure was contained in the Hong Kong and Shanghai BankingCorporation (HSBC)’s report on Vietnam’s purchasing managers’ index(PMI) in March, released on April 1.
March data pointed to modestrecoveries in the levels of both manufacturing production and neworders, following contractions in the previous month.
Companiesbenefited from an improving domestic market, increased promotionalactivity and a slight expansion in the level of incoming new exportorders, the bank said.
New export business increasedfor the first time in 11 months during March. Manufacturers linkedthe latest growth in new export sales to improved demand fromclients in China, Japan and Thailand.
Growthof new orders and production filtered through to the labour market,with March seeing employment rise for the fifth time in the past sixmonths.
Input cost inflation surged higher during March, amid reports of increased prices on international commodity markets.
Part of the increase in input prices was passed on to clients in theform of higher selling prices. Output rate of contraction charges rosefor the second successive month and at the fastest pace since April2012. However, the rate of increase in selling prices remained wellbelow that of input costs.
Vietnammanufacturers maintained a preference for reduced inventory holdings inMarch, leading to further depletion of both raw material andfinished goods stocks. In contrast, purchasing activity was raised forthe second time in the past three months, reflecting increasedproduction.
Asia Economist at HSBC Trinh Nguyensaid March’s expansion of manufacturing output is consistent with thebank’s view of a gradual recovery in Vietnam.
The process islikely to be bumpy, however, she said, adding that what's most positivemoving forward is a rebound of external demand, which should helpcounterbalance weak internal demand in the coming months.-VNA