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Manufacturing recovery continues in February: report

By Duc Minh   March 1, 2022 | 05:37 pm PT
Manufacturing recovery continues in February: report
An employee operates an agar manufacturing machine in the northern province of Bac Giang. Photo by Shutterstock/Bamboovn
The Vietnamese manufacturing sector continued to recover in February, with growth accelerating and confidence remaining unaffected.

The purchasing managers' index (PMI) was 54.3 in February, up from 53.7 in January for a fourth consecutive month of growth, according to a report released Tuesday by British research company IHS Markit.

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

Business conditions have now improved in each of the past five months after the disruption caused by the Delta variant of Covid-19 in 2021.

The growth momentum continues to be supported by stronger customer demand, according to the report.

Andrew Harker, economics director at IHS Markit, said: "The Vietnamese manufacturing sector continued to demonstrate resilience in the face of the Covid-19 pandemic in February, with growth of both demand and production gathering further momentum."

New orders increased and the rate of expansion quickened to a 10-month high, and improving international demand in February led to another marked rise in exports.

However, supply issues continued to constrain output growth. "Firms are still having difficulty enticing workers back to factories in large enough numbers to keep on top of workloads, while raw materials remain scarce," Harker said.

Manufacturers signaled a further sharp rise in input prices, reflecting higher raw material costs as suppliers upped their charges. Rising oil prices also cast a shadow.

The passing on of increasing cost burdens resulted in another rise in selling prices, the 18th in as many months.

The rate of inflation also ticked up from January.

Purchases of inputs rose in February as firms attempted to secure them to support production growth. As a result, stocks of purchases increased at the fastest pace in 10 months and to one of the largest extents on record.

 
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