Vietnam's manufacturing to recover in October 2024

Vietnam's manufacturing Purchasing Managers' Index (PMI) rose sharply to 51.2 in October, a positive recovery after facing disruptions caused by Typhoon Yagi last month.

Vietnam's manufacturing Purchasing Managers' Index (PMI) rose sharply to 51.2 in October, a positive recovery after facing disruptions caused by Typhoon Yagi last month.

Vietnam's manufacturing sector recovers strongly after Typhoon Yagi.

According to S&P Global, the Vietnam Manufacturing Purchasing Managers' Index (PMI) rose sharply to 51.2 points in October, surpassing the 50-point threshold after suffering disruptions caused by Typhoon Yagi in September 2024. Business conditions have strengthened in 6 of the past 7 months.

Last September, Typhoon Yagi hit Vietnam’s manufacturing sector hard, with heavy rains and flooding leading to temporary business closures and delays in production lines and supply chains. The Vietnam Manufacturing PMI fell to 47.3 in September from 52.4 in August.

However, in October, Vietnam’s manufacturing sector began to recover, with both output and new orders rising again. However, the rate of increase in each of these indicators was slower than in the months before September as some companies continued to face disruptions following the storms.

Despite a slight increase in export orders, international demand has been slowing. Manufacturers have been using inventories to meet orders, leading to a reduction in finished goods inventories. However, the labor market has shown signs of slowing as some companies have cut staff.

Many businesses have increased their use of inventories to meet production needs, but the rate of inventory reduction has slowed compared to the previous quarter. In addition, due to the high prices of raw materials, fuel and transportation services, businesses have had to adjust their product prices to offset costs.

Supplier delivery times, however, lengthened for the second consecutive month in October as storm disruptions continued to impact transportation. However, the lengthening was less severe than in September.

Purchasing activity picked up again amid rising new orders and output is expected to pick up in the coming months.

According to S&P Global, although rising sales and business expansion plans have brought positive expectations for production next year, uncertainty about the global political situation, especially the US election, has caused business confidence to decline.

“October data showed a recovery, driven by rising new orders and business expansion, but some companies were still feeling the effects of the storm, which limited growth,” said Andrew Harker, chief economist at S&P Global Market Intelligence.

Businesses are expecting better growth in capacity thanks to a sharp increase in orders at the end of the year.

Source: https://baodautu.vn/san-xuat-cua-viet-nam-phuc-hoi-tro-lai-trong-thang-102024-d228960.html