Manufacturing growth hits 13-month high

By Duc Minh   June 3, 2022 | 03:45 am PT
Manufacturing growth hits 13-month high
A worker at an automotive plant in the northern province of Hai Duong. Photo by AFP/Hoang Dinh Nam
Manufacturing growth accelerated last month as the recovery from Covid-19 continued apace.

The purchasing managers’ index (PMI) rose to 54.7 in May from 51.7 in April, the latest survey from S&P Global showed on Wednesday.

The growth rate was the fastest since April 2021.

There was a sharp increase in output and new orders were recorded while firms increased their purchasing activity and employment.

Business conditions strengthened the most in over a year.

"Vietnamese manufacturers are increasingly able to operate normally as pandemic disruption fades, with May seeing sharp accelerations in growth of output and new orders, in turn boosting employment and purchasing," Andrew Harker, economics director at S&P Global, said.

"There is also growing confidence that firms won't have to contend with Covid-19 issues going forward."

The sustained growth of new orders meant firms continued to hire, driving employment up for the second month running.

Inflation remained elevated however despite showing signs of easing in May, with both input and costs and prices rising at the slowest rate in three months.

Vietnam’s inflation in the first five months hit 2.25 percent against 1.29 percent in the same period last year.

Rises in fuel costs were highlighted by respondents, with surging shipping rates adding to inflationary pressures.

Lockdowns in some key Chinese cities have also affected the sector, as export demand grew softer and deliveries were delayed.

"Firms will therefore hope that business in mainland China can also return to normality soon, providing a further boost to the recovery in Vietnam," Harker said.

The S&P Global Vietnam Manufacturing PMI measures the performance of the manufacturing sector and is derived from a survey of 400 companies.

A PMI reading above 50 indicates expansion in manufacturing from the previous month, while a value of below 50 represents a contraction.

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