December 2018 rounded off a positive year for Vietnamese manufacturers, with the average Nikkei Vietnam Manufacturing Purchasing Managers’ index (PMI) coming in at 53.8 and reading the highest for any calendar year since the survey began in 2011.
Although this was a decrement from November 2018’s near-record reading of 56.5, the latest figure is in tune with 2018’s overall average. Furthermore, output and new market orders continued to increase in December 2018 with firms responding to the increased demand by taking on extra staff for the 33th consecutive month. A softening of inflation for input costs was also observed and this resulted in a fall in input prices in December 2018, which last occurred in February 2016.
Thus, it is projected that output growth will continue in 2019 and new orders and business expansion plans are expected to proceed. Additionally, firms have been observed to increase their purchasing activity, inventories and production of finished goods following the positive growth in December 2018.
Regarding this trend, Andrew Harker, Associate Director at IHS Markit has commented that, “The recent success of Vietnamese manufacturing firms in being able to generate strong new order growth continued in December. This meant that 2018 as a whole was the best calendar year for the sector since the PMI survey began in 2011 and leaves the industry well placed to have a positive 2019 despite headwinds elsewhere in the global economy.”
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