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Friday, February 3, 2023

Manufacturing business conditions continue to weaken in December

The Saigon Times

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HCMC – The S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) continued to slide further, signaling a further deterioration in conditions in the manufacturing sector.

The S&P Global Vietnam manufacturing PMI registered 46.4 in December, one point lower than the previous reading, posting below the 50.0 no-change mark for the second consecutive month. The latest decline marked the sharpest PMI drop since the third quarter of 2021.

As the Vietnamese manufacturing sector moved deeper into contraction amid falling demand in the domestic and overseas markets, firms scaled back their employment and purchasing activity, while business confidence remained muted.

Andrew Harker, Economics Director at S&P Global Market Intelligence, attributed the hardships plaguing the sector to weak demand in key export markets like China, the European Union and the U.S., leading to a second successive reduction in new export orders.

“Securing new work is likely to remain difficult until there is a pick-up in these markets, with a number of firms indicating that they expect demand to remain subdued in the near term at least,” he said.

After dropping to a 14-month low in November, confidence in the year-ahead outlook for production remained gloomy in December, despite improving slightly.

Some panelists feared market woes might persist until 2023, while several respondents were hopeful that demand would recover, leading to new orders and output growth.

S&P Global Market Intelligence forecast that industrial production in 2023 would rise 6.8% over 2022.

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