Vietnamese manufacturing continues improving in July

According to S&P Global, the world’s foremost provider of credit ratings, benchmarks, and analytics in the global capital and commodity markets, the figure has remained at its highest level since May, 2022.

In a report released on August 1, S&P Global revealed that new orders witnessed growth for the fourth consecutive month, with the expansion rate being slightly slower than the near-record pace recorded in June.

New export orders also increased, though much softer compared to the total amount of new business. Consequently, manufacturers moved to ramp up production, with the rate of expansion being the second-fastest on record.

It is said that firms had worked to expand capacity by boosting both purchasing activity and employment. Input buying surged, reaching its steepest pace since May, 2022, while staffing levels also grew modestly and slower in comparison to June.

In terms of prices, input cost inflation was only slightly weaker than the two-year high recorded last month, thereby pushing output charges to rise for the third consecutive time, S&P Global reported.

Lastly, expectations of continued growth in new orders over the coming year served to bolster confidence in the production outlook, although sentiment eased to its lowest level since January, it added.

The S&P Global Vietnam Manufacturing Purchasing Managers’ Index measures the performance of the manufacturing sector and is derived from a survey comprising of 400 manufacturing companies.

The index is based on five individual indexes with weights such as new orders at 30%, output at 25%, employment at 20%, suppliers’ delivery times at 15%, and stock of items purchased at 10%, with the delivery times index inverted so that it moves in a comparable direction. A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month; below 50 represents a contraction; while 50 indicates no change.