The Vietnamese manufacturing sector continued its recent run of improvement in April as the Purchasing Managers' Index (PMI) hit a new series- record high, surpassing the previous best from April 2011, according to the Hong Kong and Shanghai Banking Corporation (HSBC).
In a report released here on Monday, the bank said the PMI, a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing sector, posted 53.1 in April against 51.3 in March.
New business rose at a record pace, supporting strong growth of production and purchasing activity amid growth in employment following a slight reduction in March. The rate of input price inflation picked up as firms reported higher shipping costs.
Higher new orders and improved productivity led to a seventh successive monthly increase in output in the Vietnamese manufacturing sector. The rate of growth quickened and was second only to that recorded in April 2011.
According to the HSBC report, the rate of input cost inflation quickened in Vietnam for the first time in four months, while Vietnamese manufacturing firms lowered their output prices for the second month running.
Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia economist at HSBC said: "The manufacturing sector is doing the heavy lifting in Vietnam and its improvement will help bolster beleaguered domestic demand."
"The strong bounce of output, new orders, new export orders and employment are much needed to counter balance the domestic slump. We expect exports to have another stellar year, in contrast to the rest of the region, due to increased investment of manufacturing into the country and trade negotiations to expand market access, said Nguyen.
The HSBC Vietnam Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 400 manufacturing companies on five of individual indices of new orders, output, employment, suppliers' delivery times, and stock of items purchased.