70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Industry
Local industrial firms’ optimism surges to 18-month high for year ahead
Ngoc Mai 16:18, 2024/04/01
Firms are increasingly optimistic that the sector will move back into gear in the months ahead, and this confidence helped to drive accelerated job creation at the end of the first quarter.

Manufacturers were increasingly confident that production would increase over the year ahead, with optimism at the strongest level in a year and a half, according to a report from S&P Global.

 

Firms expect the launch of new products to boost output while also hoping that an improvement in market demand will help to support new order growth. Manufacturers also stepped up their recruitment efforts in March, raising employment for the second month running and at the fastest pace since October 2022.

Meanwhile, the business conditions in the manufacturing sector were broadly unchanged in March after recording marginal improvements in the first two months. The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) dipped below the 50.0 no-change mark in March, posting 49.9 after a reading of 50.4 in February.

The index therefore signaled an end to the two-month period of improving business conditions at the start of 2024 but pointed to broadly unchanged operating conditions overall. There were signs of demand weakness in March, leading to a drop in new orders despite discounts offered to help secure sales. New export orders were also down, and to the greatest extent since July 2023 amid competitive pressures and geopolitical issues.

With new orders down, firms also scaled back production at the end of the first quarter of the year, following growth in January and February. The drop in production was only marginal, however, and limited to intermediate goods firms as expansions were recorded at consumer and investment goods producers.

 Electronics production at Katolec Vietnam Company in Quang Minh Industrial Cluster. Photo: Pham Hung/The Hanoi Times

“Growth stalled in the Vietnamese manufacturing sector in March as subdued demand put the brakes on new orders and production. Demand weakness was also reflected in the PMI survey's price indices as input cost inflation slowed and an outright reduction in selling prices was recorded,” said Andrew Harker, economist director at S&P Global Market Intelligence.

"On a more positive note, firms are increasingly optimistic that the sector will move back into gear in the months ahead, and this confidence helped to drive accelerated job creation at the end of the first quarter," he noted.

Rising staffing levels, and a drop in new orders, helped firms to work through outstanding business for the second consecutive month. Moreover, the rate of depletion was the fastest in five months. Lower output requirements led firms to reduce their purchasing activity in March, the fifth month running in which this has been the case. In turn, stocks of inputs decreased solidly.

Stocks of finished goods also decreased, and to the greatest degree in 33 months. Lower production and the shipping of products to customers were behind the drop in postproduction inventories. In a number of cases, goods destined for export had been dispatched. Reduced demand for inputs contributed to a slowdown in the pace of input cost inflation, with the latest rise the softest since August last year and weaker than the series average.

Where input prices did rise, panelists linked this to higher raw material and oil prices. Manufacturers reduced their selling prices for the second time in the past three months. The marginal decline in March followed a slight increase in February and reflected a combination of competitive pressures, subdued demand, and softer cost inflation.

Finally, suppliers' delivery times were broadly unchanged at the end of the opening quarter of the year. International shipping delays and conflicts led to delays in receiving goods in some cases, but this was broadly canceled out by vendors having sufficient inventory holdings to meet orders.

RELATED NEWS
TAG: Vietnam news vietnam things to know vietnam pmi 2024 march vietnam industrial production
Other news
20:31, 2024/04/24
IT training urged to focus on semiconductors
With an abundant labor supply and a skilled workforce, human resources are Vietnam's greatest and most prominent advantage over other countries.
18:27, 2024/04/21
Hanoi Great Souvenir Fair 2024 to take place next week
Thousands of local and international tourists and business visitors will be in attendance.
18:24, 2024/04/21
As orders rise, Vietnamese textile firms see better prospects in 2024
In the face of unpredictable volatility, Vietnam's companies are investing in technology, innovation and production to meet the targets they have set themselves, whilst keeping a close eye on market trends.
17:38, 2024/04/21
C.bank to auction nearly 17,000 gold taels on April 22
The return of gold auctioning after more than 10 years is expected to bring gold prices closer to the global levels.
11:10, 2024/04/19
Trade ministry proposes purchasing renewable electricity mechanisms without EVN’s involvement
The draft decree stipulates that buyers must be organizations or individuals using electricity for production from a voltage level of 22 kV or higher, with an average monthly consumption of 500,000 kWh.
22:00, 2024/04/18
Australia and Vietnam develop competitive electricity markets
Climate change, energy, and environment are pillars of Australian Comprehensive Strategic Partnership with Vietnam.