HCMC – Vietnam’s manufacturing sector expanded for the second consecutive month in November, but growth slowed compared to October due to weakening export demand and continued cost-cutting measures.
The S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) remained above the 50-point threshold that separates growth from contraction, recording 50.8 in November, down from 51.2 in October. This reflects only modest improvement in business conditions.
Manufacturing output and new orders rose, but at a slower pace. While some firms reported increased orders from new customers, others cited muted demand. Export demand, however, declined sharply, marking its steepest drop since July 2023.
Cost-cutting measures led manufacturers to reduce workforce numbers for the second consecutive month, causing further delays in completing orders. Backlogs continued to rise for the sixth month in a row, though the increase was the slowest since June.
Input prices grew modestly in November, driven by supply shortages and currency fluctuations, prompting slight increases in output prices. Firms scaled back purchasing activity, resulting in reduced inventories of raw materials and finished goods.
Delivery times from suppliers lengthened for the third consecutive month, with firms attributing the delays to transportation challenges and sourcing difficulties. Stocks of purchases and finished goods fell sharply as firms relied on existing inventories to meet demand.
Business optimism weakened for the second consecutive month, reaching its lowest level since January. However, manufacturers remained hopeful about future growth, citing plans for new product launches, business expansions, and rising orders.
Andrew Harker, economics director at S&P Global Market Intelligence, described the slowdown in growth as “disappointing,” adding that export weakness had dragged down overall momentum. “The coming months will hopefully see demand solidify, giving firms the confidence to expand capacity,” he said.
