Vietnam’s manufacturing grows strongly as orders hit 18-month high

By VnExpress   December 2, 2016 | 03:12 pm GMT+7

Job creation quickened for the eighth month straight in November.

Vietnam reported strong growth in the manufacturing sector in November as new orders increased the most in 18 months.

The headline Nikkei Vietnam Manufacturing Purchasing Managers’ Index, or PMI, an indicator of manufacturing performance, rose to 54.0 in November from 51.7 the previous month, according to survey data released on Thursday. Any reading above 50 indicates expansion in the sector.

The improvement was the strongest for a year-and-a-half. New business increased at the fastest rate since May 2015 and new export orders also rose at a faster pace.

Rising orders also urged manufacturers to take on extra staff, with the rate of job creation quickened for the eighth month straight. Both input costs and output prices increased at a faster pace in at least 30 months.

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Andrew Harker from IHS Markit, which conducts the survey, said the manufacturing sector “looks set for a strong end to 2016.”

“One potential headwind going forward could be the re-emergence of inflationary pressures,” he said.

IHS Markit has forecast GDP growth of 5.9 percent in Vietnam in 2016, but said the rise will quicken to 6.3 percent next year.

The World Bank and the Asian Development Bank have both lowered growth projections for Vietnam this year to 6 percent after the country’s economy cooled in the first half following the impacts of drought on agricultural production and falling industrial growth.

The government is expecting inflation to hit 5 percent this year, compared to 0.63 percent in 2015.

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