Vietnam’s Manufacturing Sector Continues Solid Improvement

Foreign Direct Investment in Vietnam Jumps in Q1

ASEAN member state Vietnam saw another solid increase in manufacturing output in June, ending the first half of the year firmly in expansion mode, the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) showed on 1 July. 

A lack of disruption from COVID supported demand and production in Vietnam’s manufacturing sector in June 2022, the survey of around 400 Vietnamese manufacturing firms showed.

The Vietnam Manufacturing PMI stood at 54.0 in June, down slightly from 54.7 in May, but still signalling a solid monthly improvement in the health of the sector, S&P Global said.

Business conditions across Vietnam have now strengthened in each of the past nine months. Rising demand amid lack of pandemic disruptions led to marked growth in both output and new orders. The consumer goods category saw the highest rates of expansion, according to the survey.

Growth of new export orders quickened to the fastest pace in four months, despite some reports that shipping difficulties had limited opportunities to export.

The growth in new orders encouraged manufacturers to continue expanding workforce numbers during June, for a third month in a row. Manufacturers in Vietnam were also increasingly successful in their efforts to recruit extra staff and the rate of job creation quickened to the fastest in three and a half years.

“The Vietnamese manufacturing sector ends the first half of 2022 in good health, with firms feeling that they’ve seen the back of the pandemic and are able to generate new business at a solid rate,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.

“The main positive from the latest PMI survey was around employment, which increased at the fastest pace in three-and-a-half years. This shows that the difficulties firms were facing getting hold of staff around the turn of the year have eased, and means that manufacturers are able to respond quickly to customer requests and keep on top of workloads,” Harker noted.