At the end of 2022, the manufacturing sector in Vietnam saw a more drastic decline in domestic and international new orders and output.
This is in accordance with a study that S&P Global Market Intelligence published on Tuesday.
The S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) fell below the no-change threshold of 50.0 for the second consecutive month, falling to 46.4 in December from 47.4 in November.
The latest fall, per the report, is the sharpest since the one brought on by the pandemic in the third quarter of 2021.
For the second consecutive month, new orders declined “solidly” in December, falling more drastically than in November.
In general, weak demand circumstances were emphasized, with sources of weakness including several important export markets.
Production was reduced by manufacturers, also for the second month, in response to decreasing new orders, it claimed.
Finding new employment will probably continue to be challenging until there is an improvement in important export markets, according to Andrew Harker, economics director at S&P Global Market Intelligence.
Additionally, a number of businesses stated that they believed demand will stay weak at least in the short term.
“Manufacturers have responded quickly to the downturn in new orders, with the latest PMI data showing sharper reductions in output, employment and purchasing activity, as well as price cuts to stimulate demand,’’ he said.
Despite a little increase in November 2022, confidence in the output prognosis for the following year remained rather low, according to the survey, after having fallen to a 14-month low in that month.
Some panelists expressed fear that difficult market circumstances would continue through 2023.
On the other hand, a number of respondents indicated confidence in a recovery in demand, which would increase new orders and output, it was stated.