Workers at a manufacturing chain inside an LG Electronics Vietnam’s production plant in Hai Phong (Photo: VNA) Hanoi (VNS/VNA) - The Vietnam Manufacturing Purchasing Managers' Index(PMI) dipped fractionally below the 50.0 no-change mark to 49.9 last month,signalling broadly unchanged business conditions during the month.
Asurvey by newly-released IHS Markit showed that the recovery in the Vietnamesemanufacturing sector paused last month as a succession of storms and associatedflooding hit the country.
Thisfollowed a reading of 51.8 in October and was the first sub-50 figure in threemonths. Output decreased slightly last month, thereby ending a two-monthsequence of growth.
Thatsaid, anecdotal evidence suggested that the reduction could be temporary as anumber of firms indicated that recent stormy weather and subsequent floodinghad disrupted their production during the month. The COVID-19 pandemic was alsoa factor weighing on output.
Neworders continued to rise, but only fractionally as business was impacted by thestormy weather conditions and flooding, as well as the pandemic. The latter hada particular effect on new export orders, which decreased solidly.
Onthe other hand, a number of respondents indicated that new orders had increasedamid improving underlying demand.
Withnew order growth slowing, firms worked through outstanding business, leading toa tenth successive reduction in backlogs of work. The latest fall was solid,but softer than in October.
Fallingworkloads led firms to scale back their employment and purchasing activity lastmonth. The modest reduction in staffing levels followed a slight rise in theprevious month.
Purchasingactivity decreased for the first time in three months.
Thefall in input buying fed through to a reduction in stocks of purchases. In bothcases, however, consumer goods producers bucked the wider trend by postingexpansions.
Meanwhile,a reduction in output during the month resulted in a decrease in stocks offinished goods.
Aswell as hampering production, the stormy weather and COVID-19 pandemic combinedto disrupt the delivery of purchased items to manufacturers. Suppliers' leadtimes lengthened for the twelfth successive month and to the greatest extentsince August. Raw material shortages were also a factor behind delivery delays.
Shortagesof raw materials contributed to rises in input costs during November, withdifficulties importing items and higher prices in international markets alsocited. Input prices increased sharply, and at the fastest pace since August2018. The rate of output price inflation also quickened, but remained modest.The rise in charges was the greatest for two years.
Despitethe setback in November, firms expect production to expand over the comingyear. Confidence was centred on expectations that the COVID-19 pandemic wouldremain under control in Vietnam and cause less disruption globally.
IIPincreases slightly
Theindex of industrial production (IIP) last month is estimated to increase by 0.5percent from the previous month and by 9.2 percent from the same period lastyear.
Inwhich, the mining industry decreased by 6.2 percent; processing andmanufacturing increased 11.9 percent; electricity production and distributionincreased by 4 percent; water supply and waste and wastewater management andtreatment increased by 5.3 percent.
TheGeneral Statistics Office's socio-economic situation report for November and 11months of this year said that in the context of well-controlled COVID-19pandemic in the country and the EU-Vietnam Free Trade Agreement (EVFTA) createdthe driving force for sectors of the economy to recover and operate in the newnormal states.
Generally,the IIP in the first eleven months of this year was estimated to increase by3.1 percent over the same period last year, lower than the 9.3 percent increaseof the same period last year.
Specifically,processing and manufacturing increased by 4.7 percent, contributing 3.8percentage points to the general growth; power generation and distribution rose3.2 percent, contributing 0.3 percentage points.
Inaddition, the water supply, waste and wastewater management and treatmentsector increased four percent, contributing 0.1 percentage points; the miningindustry alone decreased by 7.1 percent, down 1.1 percentage points in theoverall growth./.
VNA
