Vietnam's manufacturing sector improved further in July on faster growth in output and new orders, the latest survey from the Nikkei and Markit Economics showed on Monday.
The headline Nikkei manufacturing purchasing managers' index, or PMI, rose to 52.6 in July from 52.2 in June. Any reading above 50 indicates expansion in the activity.
This signaled a further improvement in the business conditions in manufacturing activity and now strengthened in each of the past 23 months.
Total new business rose solidly in July on greater customer demand, while new export orders fell for the second straight month. Production increased for the twenty-second straight month in July and the pace of growth was solid and faster than in the previous month.
Backlogs fell for the second straight month in July as firms made efforts to cut outstanding business and spare capacity. Stocks of finished goods declined marginally in July due to the prompt delivery of products to customers.
Employment increased for the third straight month in July due to growth of new orders and a related rise in production requirements, and the rate of job creation quickened from that seen in June. Purchasing activity rose in July with the rate of expansion among the sharpest in the series history.
On the price front, input prices fell for the first time in three months as suppliers had reduced their prices. Output prices decreased for the tenth straight month in July due to lower input costs and competitive pressures.
"The pick-up in the rates of growth of output, new orders and employment in July are a welcome sign given the slowdown in the previous month and suggest that the manufacturing sector remains on track following a strong performance in the second quarter," said Andrew Harker, Economist at Markit.
"Export demand was again the main negative from the latest survey as new business from abroad fell for the second month running. There remains little evidence of building inflationary pressures as input prices decreased for the first time in three months and output prices fell further."
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