Vietnam’s Feb PMI drops off

Business conditions in the Vietnamese manufacturing sector slightly improved in February as growth in product output, new orders and employment held.

February output increased for the third month in a row but at a weaker pace than the previous month.

The slowdown in manufacturing output led to a considerable reduction in inventory of finished goods as manufacturing firms completed new orders with existing stockpiles.

Input costs dropped for the third consecutive month due mainly to tumbling oil prices, which have been on an eight-month losing streak.

Following the drop in input prices and fragile client demand, manufacturers had little choice but to decrease their output charges.

Slightly improved client demand helped moderately increase new orders, which contributed to lifting export orders across the month.

Employment and staffing levels remained relatively unchanged as lay-offs by some firms and recruitments at others cancelled each other out. Companies in the retail and consumer sectors and those trading in intermediate goods hired the most people during the month.

The Vietnamese manufacturing sector saw growth weaken in February since weak global demand conditions hampered efforts to sustain the momentum gained at the start of the year, said Andrew Harker at London-based Markit, a financial data provider that compiles the report.

Meanwhile, costs continued to fall sharply on the back of lower prices for commodities, particularly oil, he added.