The headline Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI), an indicator of manufacturing performance, increased from 53.9 in May to 55.7 in June, marking the second-fastest rise since the survey began, behind only that recorded in March 2011 when the survey started, Nikkei and IHS Markit has said in a report on Monday morning.
A reading below the 50 neutral mark indicates no change from the previous month, while a reading below 50 indicates contractions and above 50 points to an expansion.
The reading signaled a marked monthly improvement in the health of the sector, and one that was second only to the series record seen in March 2011, the report noted, adding business conditions have now strengthened in each of the past 31 months.
Strong and accelerated increases were seen for output and new orders amid general improvements in client demand. This fed through to a record rise in employment and a substantial increase in purchasing activity.
Meanwhile, sharper increases in both input costs and output prices were recorded as new orders soared and client demand was stronger.
Manufacturers responded to higher input costs by raising their output prices, extending the current sequence of inflation to ten months. Selling prices also increased at the fastest pace since February, according to the report.
Although easing to a four-month low in June, confidence among manufacturers remained strong.
According to respondents, new order growth is set to support increases in output over the coming year.
“The Vietnamese manufacturing sector appears to be motoring midway through 2018, with growth of output and new orders among the fastest seen since the survey began in 2011. The current growth phase has been extremely positive for Vietnamese workers, with firms taking on extra staff at a record pace during June,” said Andrew Harker, associate director at IHS Markit, which compiles the survey.