Ihs Markit

Business sentiment eased to a three-month low on worries about the Covid-19 outbreak, but firms remained optimistic overall that output will increase over the coming year.

Hopes that these trends will continue and that the Covid-19 pandemic will come to an end supported the greatest business confidence since mid-2019.

The health of the sector has now strengthened in three successive months.

While purchasing activity and employment were scaled back, business sentiment improved to a 16-month high.

The Vietnamese manufacturing sector returned to growth in September as concerns around the outbreak of the Covid-19 pandemic in the country eased.

Despite a drop in output in July, firms remained confident in the 12-month outlook for production.

The Vietnam Manufacturing Purchasing Managers' Index (PMI) posted 51.1 in June, up from 42.7 in May and above the 50.0 no-change mark for the first time in five months.

The sector saw a softer contraction than in April as the Covid-19 pandemic was brought under control in Vietnam.

Business sentiment dropped to the lowest since this series was added to the survey in April 2012 amid concerns around the effects of Covid-19.

Covid-19 has severely hampered the Vietnamese manufacturing sector in February, both on the demand and supply side.