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Vietnam Manufacturing PMI rockets after 4 years

Wed, 06 May 2015. Last updated Thu, 25 Jun 2015 09:06

After four years from 2011, the Vietnam Manufacturing PMI recovered with the highest growth rate of 53.5 point, recored in April 2015. With the optimistic context, the production industry in Vietnam will contribute to boost others in the economy.

Purchasing Managers Index (PMI) increased from 50.7 in March to 53.5 in April, the biggest point since April 2011. According to HSBC, the rocket of Vietnam Manufacturing PMI in April is due to the increasing demand of customers, which results in the increase in quantity of products and new orders. Andrew Harker, high-ranking economic expert of Markit said that the growth of Vietnam production industry stepped on a new level when the figure reached the most impressive point within four years. "The main factor of the improvement is the success of Vietnam enterprises in seeking and cooperating with new customers when the pressure of inflation reduces", he confirmed. The survey result showed that the number of orders increases in 19 consecutive months with the fastest rate in four years. Some companies said that they have sought new customers. New orders from foreign markets also surge.

PMI Vietnam April 2015

The rise in quantity helps the volume of the backlog reduce. Companies made their all attempt to finish all orders as fast as they can. They also recruited more employee to meet the demand of work volume in months. From the end of 2014, the cost of input is at low level. Members of survey said that the material cost fell, including gas and steel, while other answered that there are requests of ordering suppliers to reduce price. However, the input cost in April is the lowest point within five years. The cost of materials reduces, which makes the output cost of Vietnam production companies fall and enhance the domestic and international demands.

The number of new order increased makes the purchasing activity in 20 consecutive months. However, delivery time of suppliers is lengthened when there are reports on the lack of materials at the companies. However, the time is not too long, as the fast payment enhances the delivery. Inventories of finished goods also increased after a fall in the previous month, but some said that they were mainly goods to delivery. Last year, the PMI also climbed to 53.1 points, from 51.3 points in the previous month. The strong growth of production in accordance with a survey by HSBC also coincided with the figures of GSO. According to data from the agency, the index of industry production (IIP) is estimated to increase 9.5% in April year on year, the highest point from February 2013. It is expected that in the first 4 months, IIP rose 9.4%, higher than the growth of 5.5% year on year.


A automobile factory in Vietnam


The total consumption index of the entire Vietnam processing industry and manufacturing industry in March 2015 rose over 35% month on month, while the inventory tends to slow down, and increased by 11.3% on April 1, 2015, lower than the rise of last year's period (13.9%). The report showed that during the first four months, many producers recruited more employee to serve the increasing production. From November 2014, all input cost started to fall sharply, while the price from suppliers also decreased. The decrease in cost of input is the main factor of enterprises in Vietnam to reduce cost.

The number of producing enterprises rose, resulting in the exciting purchasing activities during the first four months. Procurement of input materials has risen in 20 months, with the largest growth rate since April of last year. However, this makes the rate of inventory increase before producing, the highest point within four months. Acknowledging the PMI in April of Vietnam, the economic expert in the region of Asia - Trinh Nguyen, said that in the last April, Vietnam production industry reached the impressive growth, the highest one within four years. The focus point of the improvement is that Vietnam enterprises will have more new orders.

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