Conference promotes Japan’s financial investment in Vietnam

Vietnam Manufacturing Purchasing Managers’ Index (PMI) in July dipped to 51.7 from 52.5 in June. — bizlive.vn The Vietnam Manufacturing Purchasing Managers’ Index (PMI) moderated in July, with slower increases in both output and new orders, the latest survey from Nikkei’s IHS Markit showed on Tuesday. “The composite indicator of manufacturing performance dipped to 51.7 in July, down from 52.5 in June. The reading represented a modest improvement in the health of the sector and one that was weaker than registered at the end of the second quarter,” Nikkei’s IHS Markit reported. Both output and new orders increased at slower rates during July. The rise in production was the weakest in the current nine-month sequence of expansion. New orders have risen continuously since December 2015 and increased solidly in July. This was also the case with new business from abroad. “With new orders increasing to a greater extent than output, backlog of work accumulated and stocks of finished goods depleted. The rise in outstanding business was solid and the strongest since April 2011. Meanwhile, the marginal decline in post-production stocks was the first in three months as firms used stocks to help fulfill orders,” the survey showed. Rises in new orders and higher production requirements led manufacturers to increase staffing levels for the sixteenth successive month. The rate of job creation was little-changed from that seen in June. Andrew Harker at IHS Markit, which compiles the survey, said: “Output growth…... [read more]

Speaking at a recent seminar on the country’s growth prospects for 2016 held by the CEO Club Ho Chi Minh City, CIEM President PhD Nguyen Dinh Cung said the nation is looking at growth of 6.5% this year. “The growth in 2015 as well as the prior two years has largely been underpinned by expansion of the mining industry— and the current level of extraction of oil and coal from the ground isn’t sustainable over the long term,” said Dr Cung. “In addition, this past September the manufacturing Purchasing Managers’ Index (PMI) fell below the 50-point threshold, to 49.5, for the first time in two years, a strong foreshadowing production is slowing down.” The senior economist stressed that the agriculture industry along with the nation’s farmers have encountered a myriad of difficulties this year, most of which stem from the small scale farming methods utilized. Until the agriculture industry makes the transition to large scale production methods and modernizes its machinery and equipment as well as technologies it will continue to drag the overall economic growth of the nation downwards. “The garment and textile industries are also getting bogged down by an overreliance on imported raw materials,” said Cung, which contributes to an ever widening trade imbalance with the nation’s trading partners. He said the overall trade shortfall in the nine months leading up to October of 2015 was a whopping US$4.03 billion. Most notably China continued to be the biggest source of foreign goods, accounting for nearly 30% of…... [read more]

New orders down for second month Dinh Duy By Dinh Duy - The Saigon Times Daily HCMC - Though Vietnam’s manufacturing sector improved in October, the number of new orders decreased marginally for the second month running, according to a Purchasing Managers’ Index (PMI) report released on October 2. The report said falling new orders led to a further reduction in backlogs of work and weaker job creation. Meanwhile, both input costs and output prices continued to drop amid reductions in raw material costs. The headline Nikkei Vietnam Manufacturing PMI posted 50.1 in October, only fractionally above the 50 no-change mark and thereby signaling little change in business conditions over the month. The reading was up from 49.5 recorded in September. A marginal increase in production helped the headline index rise back above the 50 mark, after a fall in the previous month. Those respondents that saw growth of output linked this to higher new orders. However, other panelists saw a new business decline, thereby feeding through to lower production. New business decreased marginally overall in October, the second successive month in which a reduction has been recorded. Panelists linked the fall to declining client demand, which was also a factor behind a fifth consecutive monthly contraction in new export orders. Besides, manufacturers in Vietnam continued to report lower raw material prices during October, feeding through to reductions in both input costs and output prices. In both cases, the rate of decline was solid, but the weakest in three months.…... [read more]

The NFSC reports consumers’ purchasing power has not much improved, with the consumer price index (CPI) in November increasing by only 0.34% compared to the previous month - a record low since 2009. The Commission attributes the modest growth to a weak consumer demand in 2013 and the impact of adjustments in the prices of public services and essential goods. However, this year’s inflation rate will be below 6.3% in 2013, lower than last year’s. Obstacles to production Industrial production has remarkably improved over the last few months of this year, but there remain obstacles to overcome. The Index of Industrial Production (IIP) in 2013 is estimated at 5.8%, almost the same as in 2012, but lower than the previous two years. The 11-month IIP already hit 5.6%, or 0.5% higher than in the same period last year. The General Statistics Office (GSO) has announced that Vietnam’s 11-month IIP was 16.2% higher than last year’s corresponding period figure, with the purchasing managers’ index (PMI) earning more than 50 points in October thanks to an increase in new export orders. The State-owned sector has slightly increased by 3.6% in export revenue, but the direct foreign investment (FDI) sector by 23.5%. Improvements in the local production sector have led to an increase in imports, particularly of machinery and equipment, and a drop in the number of suspended businesses while new businesses are taking shape. In fact, the national economy is still in a bind as credit growth remains at a low level…... [read more]

The August survey says, there was a survey record increase in employment as manufacturers were in the positive for activity. Profitability remained under pressure, however, as output charges were little changed, but input prices rose at the sharpest pace since March. Rising transportation costs were widely reported. The headline seasonally adjusted Purchasing Managers’ Index™ (PMI™) recorded 49.4 in August. That was an improvement on July’s 48.5 and the best reading since April but, by remaining below the 50.0 no-change mark, signaled a marginal deterioration of manufacturing operating conditions. New orders received by Vietnam’s manufacturers continued to fall in August, extending the current run of contraction to four months. Market activity remained slow, according to panellists, and customer demand soft. That said, there were reportedly pockets of growth, the net result being only a marginal overall contraction in new work. Latest data showed that new export orders also continued to decline. The marginal fall was the third in successive months. Export market conditions were reported to have remained tough, but were showing signs of stabilisation. Manufacturing production volumes fell for a fourth month in succession during August. The decline was linked to a fall in new orders. In line with the trend for sales, the degree to which output fell was modest. Manufacturers were again able to make inroads into their work outstanding during the latest survey period. Backlogs of unfinished orders fell for the seventeenth successive month, and again at a marked pace. Falling backlogs in part reflected a depletion…... [read more]

The forecast formed part of the bank’s 2013 Asian Development Outlook, released in Hanoi on April 9. The country’s GDP growth slowed to 5 percent in 2012 due to the continuing impact of 2011’s tight fiscal and monetary policies. GDP grew by 4.9 percent in the first quarter of 2013, marginally higher than the same period a year earlier, and the purchasing managers’ index rose slightly as orders increased. In March 2012 the government approved a reform plan intended to strengthen the banking system through mergers, recapitalisation, the adoption of international prudential standards, and improvements in bank supervision. Some financially stressed banks were merged, but there was little progress in recapitalising banks or resolving non-performing loans. Tomoyuki Kimura, ADB Country Director for Vietnam, said while subdued economic growth prompted the authorities to ease monetary policy in 2012, credit growth was constrained by the uncertainty surrounding the banking system’s health. He pointed to how economic recovery depends on the acceleration of banking and State-owned enterprise (SOE) reforms, suggesting the government take a more strategically selective approach towards structural reforms and particularly to SOE restructuring. Some initial success and progress can spur further reform momentum, he said. The bank also forecast that Vietnam’s inflation is likely to be kept at 7.5 percent in 2013 before moving up to 8.2 percent in 2014. This view assumes reasonable weather for food production, a broadly stable VND exchange rate, and restrained policy stimulation. The trade surplus is expected to climb to a record US$12.5 billion…... [read more]

The latest HSBC survey registers Vietnam’s purchasing managers’ index (PMI) at 48.5 in July, an improvement on June’s 46.4 but its third successive month below the 50.0 contraction threshold. The month’s modest falls in output and new orders are said to reflect underlying market conditions impacted by a decline in clients’ purchasing power. Data indicated the net new order decline was partly due to falls in international interest. New export orders slipped for a second month in a row, and worryingly, at the fastest rate since the start of 2013. The decline in new demand has helped companies catch up on backorders, completing existing contracts. But it also fuelled the sharpest surge in unsold stock since June 2012. Inventories have now grown for two months in a row. Despite the two months of contraction, Vietnamese manufacturers left staffing levels unchanged. The larger payrolls some employed to bolster production were balanced by others who deemed staff cuts necessary. Output prices as measured in tariff averages fell for the fourth month in succession. The discounting reflects intensifying market competition and attempts to stimulate sales. Some plants appear to have reduced prices in hopes of liquidating inventory excesses. In contrast, costs continued to rise. Limited input material supplies have resulted in seven straight months of Inflation. There is also evidence the stronger US dollar has raised import costs. HSBC Asia Economist Trinh Nguyen said the continuing slackening of Vietnamese manufacturing activity reflects weakness both domestically and abroad.... [read more]

The prediction was made at a scientific seminar in Hanoi on December 12 discussing Vietnam’seconomic prospects for 2014. The Ministry of Planning and Investment’s National Information and Socio-Economic Forecasting Centre predicts the 2014 reduction in corporate income tax, from 25% to 22%, will be a boon to business activity upon taking effect. Fiscal policies in 2014–2015 will focus on maintaining a low interest rate of 10–13% and creating favourable conditions for businesses to expand production. Senior World Bank Economist Dr. Doan Hong Quang is optimistic about Vietnam’s 2014 after the country achieved macroeconomic stability, controlled inflation, regained the business community’s trust, pushed up its Purchasing Managers' Index (PMI), and increased the number of newly-established enterprises. He emphasised the Vietnamese economy’s dependence on a global economic recovery. The seminar explored two 2014–2015 economic growth scenarios. In the first scenario, GDP grows at a rate of 5.67%, with the Consumer Price Index (CPI) climbing to 7%. The second scenario puts the GDP growth rate at 6.2% with CPI reaching 7.5%.... [read more]

The Hong Kong and Shanghai Banking Corporation (HSBC)’s Purchasing Managers’ Index (PMI) report showed that business conditions in the Vietnamese manufacturing sector improved in December as output and employment increased at sharper rates supported by new order growth. Meanwhile, purchasing activity rose at the fastest pace in the series history. The rate of input cost inflation accelerated slightly, but manufacturers lowered their output prices in an attempt to support growth of new business, said the report. The headline seasonally adjusted PMI – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted 51.8 in December, up from 50.3 in November. The reading signalled a fourth successive monthly improvement in operating conditions, and the second-strongest in the history of the series. New orders increased for the third time in the past four months during December as panellists reported improving client demand. Moreover, new business rose at a pace that was only slightly slower than October’s series record. On the other hand, new export orders decreased for a second consecutive month. Growth of new orders led firms to raise their production. Stocks of finished goods fell solidly as firms delivered products to customers. The depletion of post-production inventories was the strongest in seven months. HSBS said rising workloads had a positive impact on employment in December, with the rate of job creation picking up to the strongest in three months. Meanwhile, the rate of expansion of purchasing activity hit a record high as panellists…... [read more]

Domestic garment maker Company 26, one of the biggest garment exporters in Hanoi, announced that its revenue in the first two months of this year would rise by a record 20% year on year. “Local and overseas demand is recovering, so we have to increase production and recruit more workers,” said Nguyen Viet Thang, director of one of the company’s factories. Company 26’s story is reflected in HSBC purchasing managers’ index (PMI) report release in early February that started “growth in the Vietnamese manufacturing sector gathered momentum in early 2014, highlighted by the strongest rise in output since April 2011, and the fastest rise in purchasing activity in the survey’s history.” The headline seasonally adjusted PMI – a composite indicator designed to provide a single figure snapshot of operating conditions in the manufacturing economy – increased for the second month, from 51.8 in December 2013 to 52.1 in January 2014. A fourth successive monthly increase in Vietnamese manufacturing output from 52.6 to 53.5 reflected rising demand for Vietnamese goods, according to the report. Furthermore, the new export orders sub-index mirrors this trend, with the sub-index increasing to 52.2 from 49.1 in December 2013. The most positive jump came from the quantity of purchases, which rose to 55.2 from 53.8 in December, reflecting stronger demand of goods for production. Nearly 23% of respondents said new business from abroad had increased while over 15% of respondents had increased employment during January, and over 27% of those interviewed reported a fall in backlogs.…... [read more]




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