Want to be in the loop?
subscribe to
our notification
Business News
VIETNAM'S MANUFACTURING EXPECTED TO GROW IN 2024
Thanks to hopes for a recovery in demand both domestically and in export markets, plus business expansion plans, manufacturing is forecast to increase this year, according to S&P Global.
The S&P Global Vietnam Manufacturing Purchasing Managers' Inde (PMI) posted 48.9 points in December, remaining below the 50 and signalling a fourth consecutive monthly decline in business conditions in the sector. That said, the index rose from 47.3 points in November to point to a softer rate of deterioration.
The health of the sector worsened through much of 2023, improving only in February and August. The average PMI reading across the year was the lowest since the COVID-19 pandemic outbreak in 2020.
The latest decline in operating conditions again reflected a subdued demand environment, with total new orders down for the second month running in December. The pace of reduction eased from that seen in November, however, as new export orders neared stabilisation.
Anecdotal evidence suggested that recent price rises had deterred customers and contributed to the latest reduction in new orders. Responding to these signs, manufacturers limited the extent to which they raised their selling prices at the end of the year, hiking charges only fractionally and to the least extent in the current five-month sequence of inflation.
The marginal nature of the rise in selling prices contrasted with that seen for input costs, which continued to increase markedly and at a pace that was little-changed from the nine-month high seen in November.
According to respondents, higher input costs often reflected increases in prices for electricity and oil, plus exchange rate weakness. With new orders decreasing in a challenging demand environment, manufacturers cut their production volumes again in December, extending the current sequence of decline to four months
However, hopes for growth of manufacturing output in 2024 meant that firms kept their employment and purchasing activity broadly stable in December despite falls in new orders. In both cases, the broad stability at the end of the year represented an improvement from modest reductions in November.
Andrew Harker, economics director at S&P Global Market Intelligence said, “The final month of the year was indicative of the picture for much of 2023 in the Vietnamese manufacturing sector, with subdued demand limiting production volumes. Firms responded to demand weakness by restricting price rises in December to try and help stimulate new business. This was despite a further marked increase in their own input costs."
Attention now turns to the prospects for 2024, with firms still optimistic on balance that output will expand. This led to broad stability of employment and purchasing activity despite the reductions in new orders, as manufacturers attempt to maintain capacity in the hope of better days to come, he said.
Source: VCCI
Related News
VIETNAM’S GDP TO GROW 5.5% THIS YEAR – WB
This forecast is based on the assumption of a moderate recovery in manufacturing exports in 2024, fueled by rebound growth of 8.5% year-on-year in the fourth quarter of 2023 and 17.2% year-on-year in the first quarter of 2024, reflecting strengthening global demand, said Dorsati Madani, senior country economist at the WB in Vietnam.
FARE REFUND FOR VISA REJECTION
Cathay Pacific will offer full refunds for cases of visa rejection to provide you with the confidence to explore the world with ease. If you are planning to fly to a destination that requires an entry visa, you can now book with greater peace of mind.
FOUR COMMODITIES POST Q1 EXPORT VALUE OF OVER 5 BILLION USD
The total export turnover of agricultural, forestry, and fisheries products in the first three months of 2024 is estimated to reach 13.53 billion USD, an increase of 21.8% compared to the same period of 2023.
MOIT PROPOSES SCHEME TO BOOST RENEWABLE ENERGY PROCUREMENT
The proposed Direct Power Purchase Agreement (DDPA) mechanism, outlined in the draft decree, targets organisations and individuals consuming electricity from the 22kV power grid or higher, with a monthly consumption averaging 500,000kWh. However, residential households are excluded from direct procurement.
REAL ESTATE BONDS PLACE PRESSURE ON ISSUING FIRMS
The ministry’s recent report underscores concerns within Vietnam’s corporate bond market for 2023 and 2024. It emphasizes the critical need to address hindrances to the real estate sector in line with the objectives provided in Government Resolution No. 33/NQ-CP, which aims to stabilize the industry.
DA NANG CUSTOMS FOCUSES ON DEVELOPING CUSTOMS-BUSINESS PARTNERSHIPS
Da Nang Customs Department issued an action plan for developing customs-business partnership in 2024. One of the new events this year is the workshop on “Settlement reports for enterprises engaged in outsourcing, export production and export processing” held in Da Nang Customs Department on April 16, 2024.