This was the 10th consecutive month the PMI had been above 50. An index reading above 50 indicates an overall increase while below 50 is an overall decrease.
In its report released on July 1, HSBC said the Vietnamese manufacturing sector continued improvements in business conditions in June although the rates of growth in output and new orders eased during the month.
New manufacturing orders had risen for the seventh consecutive month in June. The rate of expansion was solid, but slowed for the second month running, it said.
Where new business rose, panelists also reported improved customer demand. The rate of growth in new export orders also eased during the month.
HSBC said growth of new orders led to another increase in production although the impacts of the worker protests on factories in May put the brakes on the pace of expansion. However, manufacturing output has now risen in each of the past nine months.
As covered by the Daily, many workers at industrial zones in Binh Duong, Dong Nai, HCMC and Ha Tinh walked off the job in mid-May in protest against China’s illegal placement of its giant oil rig Haiyang Shiyou-981 deep inside Vietnam’s exclusive economic zone and continental shelf and ill-intentioned elements took advantage of this to incite looting and storming at enterprises in the localities. But, central and local agencies stepped in immediately to put the situation under control.
According to the HSBC report, a weaker rise in new orders led companies to work through their backlogs of work last month. Outstanding business fell for the second month in a row and at a slightly faster pace than in May.
Moreover, the enforcement of weight restrictions on trucks added to cost burdens last month. As a consequence, input prices rose sharply again, albeit at a slightly weaker pace than in May. The tonnage limits also impacted delivery times.
Meanwhile, purchasing activity continued to increase, extending the current sequence of expansion to 10 months. However, the rate of growth eased to the weakest since September 2013.
Increased input buying helped companies build reserves of inventories, with stocks of purchases rising at the sharpest pace since July 2011. Pre-production inventories have increased in two of the past three months.
Panelists responded to sharp rises in input costs by raising their output prices in June. The increase was modest, but the first since January and the strongest in 15 months.
The rate of job creations in the Vietnamese manufacturing sector remained marginal. While higher new orders encouraged some firms to raise their staffing levels, other companies reported that employee resignations had led to a drop in staff numbers.
Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC, said the manufacturing sector continued expansion at a solid pace, albeit with a slight slowdown. Stronger demand is the main reason.
“External demand decelerated but we expect this to be temporary. Given low inventories and robust new orders, we expect the sector to continue to perform well, especially as the impact from recent tensions fades,” she said.
Đăng ký: VietNam News