The Purchasing Managers’ Index (PMI) of Vietnam posted 50.3 in August, down from 51.7 in July and falling for the fourth consecutive month to signal the weakest improvement in business conditions since November 2013, said HSBC Vietnam and Markit Economics Limited.

HSBC’s press release issued on September 3 said the growth rate in manufacturing output eased again in August and was the slowest in the current 11-month sequence of expansion.

Behind the weaker rise in output was a fall in new orders, the first in nine months, but the reduction was only marginal.

Lower new business also impacted on stocks of finished goods, which increased at the strongest pace in 13 months. Some panellists attributed the accumulation of inventories to delays in deliveries of products to clients which were partly due to the enforcement of truck weight restrictions in August.

A further sharp rise in input costs was recorded during the month amid increased costs of transportation linked to the tonnage rules and higher fuel costs. The passing on of higher cost burdens to clients lead to a third successive monthly increase in output prices at Vietnamese manufacturing firms.

“The slowdown of activity is expected as new orders are dragged down by weak external and internal conditions. A build- up of inventories and weakening of new orders suggest that output will remain subdued in the months ahead,” Asia Economist at HSBC Trinh Nguyen was quoted by the press release as saying.

“We expect output to rebound in the fourth quarter on better demand”, she added.-VNA