Rising demand of international market sends new manufacturing orders up
Business activities in the Vietnamese manufacturing sector improved, as the number of new orders jumped in February due to the rising demand from the global market, which, in turn, saw firms raising output, staffing levels and purchasing activity.
A report released by IHS Markit on March 1 indicated that Vietnam’s Manufacturing Purchasing Managers’ Index (PMI) rose to 51.6 in February from 51.3 in January, indicating an improvement in business conditions. The health of the manufacturing sector has been strong for three straight months.
The number of new orders has risen for the sixth consecutive month as a result of the expansion and improvement in the export business, according to the report.
Due to higher new orders and output requirements, manufacturers have increased their staffing levels and the rate of job creation rose for the second time in three months.
Purchasing activity continued rising in February, while backlogs of inputs reduced as they were used for production. Difficulties in purchasing material such as the lack of containers and supply capacity also contributed to the reduction in backlogs.
The imbalance sent the cost of inputs up in February, forcing manufacturers to revise up the prices of products. However, this was a mild increase in prices.
The report also showed that the business confidence continued to decrease to the lowest level since August last year due to fears over the impact of the ongoing coronavirus pandemic.
Andrew Harker, economics director at IHS Markit, said that if Vietnam successfully brings the coronavirus outbreak of this wave under control, the country’s manufacturing sector will grow.
IHS Markit also forecasts that Vietnam’s industrial production will rise 6.8% this year.