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<h2 style="text-align:justify">&nbsp;</h2>

VOV.VN - Vietnam&rsquo;s Manufacturing Purchasing Managers&rsquo; Index&trade; (PMI) remained unchanged at 50.3 in May, signaling a second consecutive marginal monthly improvement in business conditions in the industry, according to the latest report published on June 3 by S&amp;P Global.

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<img alt="vietnamese manufacturing sector rebounds for two consecutive months picture 1" src="https://media.vov.vn/sites/default/files/styles/large/public/2024-06/pmi.jpg" title="vietnamese manufacturing sector rebounds for two consecutive months picture 1" />

The health of the industry has fluctuated only fractionally throughout the opening five months of the year.

According to the report, growth was sustained in the Vietnamese manufacturing industry in May thanks to a continued rise in new orders, prompting a faster expansion of production.

Firms also moved to increase their purchase, although employment declined for the second month running amid resignations and extended staff absences.

Meanwhile, there was a marked acceleration in the rate of input cost inflation during the month. In turn, manufacturers subsequently moved to raise their own selling prices for the first time since February.

Experts shared that new orders increased solidly once again in May amid a strengthening demand environment helping firms to secure new customers and bring in new business. The rate of expansion was only slightly softer than that seen in April, however.

The expansion of total new business encouraged manufacturers to raise their production volumes for the second month in a row. Moreover, the rate of growth quickened to its fastest level seen since September 2022.

Despite increases in new orders and output, manufacturers recorded a second successive monthly fall in employment midway through the second quarter.

Economists pointed out that despite enduring a drop in staffing levels, enterprises were able to keep on top of workloads in May and reduced outstanding business following a marginal increase in the previous survey period.

Where companies purchased inputs during the month, they were faced with a sharp increase in prices. In fact, the rate of inflation rapidly increased and was at its fastest since June, 2022.

A number of respondents indicated that currency weakness had added to material prices, while there were some reports of higher oil and fuel costs. Around one-quarter of respondents therefore signaled an increase in input costs, against 5% that posted a decrease. The sharp rise in input costs fed through to an increase in selling prices, the first in three months. The pace of charge inflation was the joint-steepest recorded in 15 months, on a par with that seen in October 2023.

Andrew Harker, economics director at S&amp;P Global Market Intelligence, said, &ldquo;The latest S&amp;P Global Vietnam Manufacturing PMI data was something of a mixed bag. On the positive side of the ledger, new orders were up solidly again amid signs that demand growth is being sustained, prompting a sharper increase in production in May.&rdquo;

&quot;On the other hand, there are concerns around staffing levels and inflationary pressures. The former decreased again and at a solid pace, potentially limiting capacity at firms. Meanwhile, cost inflation was the fastest in close to two years, feeding through to higher output prices. This could have the effect of restricting demand in the months to come,&rdquo; he added.

&quot;Overall, companies are optimistic regarding the future, with success in securing new business hopefully acting to overcome the headwinds being felt elsewhere,&quot; he noted.

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