HCMC – Vietnam’s manufacturing sector faced a slowdown in December 2024, with the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) dropping to 49.8 from 50.8 last month, marking the first time in three months it has fallen below the 50-point threshold.
The report highlighted three key trends: slowing growth in production output and new orders, a significant decline in business confidence, and continued job reductions.
Data for the survey, conducted between December 5 and December 13, was collected from approximately 400 manufacturers across various sectors and business sizes. While both production output and new orders registered slight growth, the pace of expansion weakened considerably, particularly in export orders.
Job cuts have conntinued for three straight months with inventory levels rising and new orders decreasing, which indicates manufacturers are under growing pressure to adjust to unpredictable market conditions.
December alone saw a sharp rise in inflationary pressures due to higher input costs, primarily fueled by increasing oil and metal prices. Companies responded by raising their selling prices, adding further complexity to the inflationary environment.
Andrew Harker, economics director at S&P Global Market Intelligence, said that global market uncertainties had dampened business confidence among many manufacturers. Despite this, he noted that some firms were optimistic about long-term prospects, anticipating a recovery in output due to economic measures and the resilience of the market.
He highlighted uncertainty surrounding the U.S. tariff policies as a significant risk for Vietnamese manufacturers, adding that clearer information on these policies would help mitigate risks and enable businesses to make more effective investment decisions.
