Vietnam's manufacturing sector continued to grow in November 2024 but at a slower pace than the previous month, due to weaker global demand, while employment also fell for the second consecutive month.
This is the content stated in the Purchasing Managers Index (PMI) Report. Vietnam manufacturing industry by S&P Global PMI, announced on the morning of December 2.
The report showed that output and new orders grew more slowly, with orders affected by weakness in exports. Meanwhile, employment continued to decline amid cost-cutting efforts, leading to a further increase in backlogs of work.
Input costs rose, but only modestly, leading to a slight increase in output prices. The manufacturing PMI stayed above the 50-point mark in November, indicating an improvement in business conditions for the second month in a row after a Typhoon Yagi-related deterioration in September.
However, November's reading of 50.8 was still down from October's 51.2, meaning the health of the manufacturing sector has only strengthened modestly. Like overall business conditions, manufacturing output rose for the second month in a row, but at a slower pace than in October.
Evidence, some business increased production to meet rising new orders, but some firms reported relatively weak demand, causing output growth to slow.
“Although total new orders increased amid improving demand and new customer acquisitions, weakness in international demand weighed on overall growth,” the report said.
In fact, new orders from abroad fell for a second straight month after rising slightly in the previous month, and exports fell at their sharpest pace since July 2023.
While output and new orders continued to rise, albeit at a weaker pace, employment fell for the second consecutive month in November. There were cases of businesses cutting jobs to cut costs.
With fewer employees, businesses are struggling to fulfill orders on time. As a result, backlogs of work have increased for the sixth consecutive month.
Manufacturers continued to face lengthening supplier delivery times in the middle of the final quarter of the year. Delivery times lengthened for the third consecutive month, and the extent of the lengthening was greater than in October.
Business confidence fell for the second month in a row, and the decline was the lowest since January. However, manufacturers remained optimistic that output would increase next year, with expectations linked to new product launches and business expansion plans, plus rising new orders.
Andrew Harker, Director Economy "Vietnam's manufacturing sector grew in November, but the pace of growth in output and new orders slowed. The slowdown reflected weakening international demand, with exports falling by the largest amount since July 2023," said S&P Global Market Intelligence.
In this context, businesses continue to control costs and cut jobs, thereby limiting their ability to complete orders on time.
"Hopefully demand will strengthen in the coming months, which will give companies the confidence to increase capacity," said Mr. Andrew Harker.
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