Vietnam Manufacturing Growth Continues Despite Storm Disruption
Samantha LuanVietnam's manufacturing sector maintained growth in November despite severe storms disrupting supply chains, according to the latest S&P Global Vietnam Manufacturing PMI data.
Vietnam's manufacturing sector maintained growth in November despite severe storms disrupting supply chains, according to the latest S&P Global Vietnam Manufacturing PMI data.
The PMI posted 53.8 in November, slightly down from 54.5 in October, but still indicating solid improvement in business conditions. This marks the fifth consecutive month of strengthening operating conditions.
New orders increased for the third straight month, helping drive production growth, though both metrics expanded at a slower pace than in October. New export orders grew at a faster rate, reaching a 15-month high, with manufacturers noting improved demand from mainland China and India.
Severe weather conditions in November significantly impacted supply chains, with suppliers' delivery times lengthening markedly to the largest extent since May 2022. The storms also hampered manufacturers' ability to complete work on time, leading to the sharpest accumulation of backlogs since March 2022.
Despite these challenges, employment increased for the second consecutive month as firms responded to higher output requirements. The modest rise in staffing levels was the largest in almost a year-and-a-half, with respondents indicating new staff were often hired on a full-time basis.
Manufacturers increased purchasing activity for the fifth straight month, with the rate of expansion quickening to a four-month high. Stocks of inputs also rose slightly for the second month in a row.
The storms contributed to higher raw material costs as supply was restricted. Input prices increased sharply, marking the second-fastest pace since July 2024, though inflation eased from October. Output price inflation also softened but remained solid as firms passed higher costs to customers.
Looking ahead, manufacturers expressed optimism about the year-ahead outlook for output, with sentiment reaching a 17-month high. Nearly half of respondents predicted increased production, citing expected improvements in new orders and hopes for calmer weather conditions.
Andrew Harker, Economics Director at S&P Global Market Intelligence, noted: "The pick-up in growth seen in October was largely sustained through to November as the Vietnamese manufacturing sector looks to be enjoying a positive end to the year. While rates of expansion in output and new orders eased, firms took on extra staff at a stronger pace in order to deal with workloads."
