Jakarta: The final month of 2022 saw the Vietnamese manufacturing sector move deeper into contraction amid deteriorating demand both domestically and abroadm according to S&P Global.
The S&P Global Vietnam Manufacturing Purchasing Managers' Index™ (PMI®) dropped to 46.4 in December from 47.4 in November, posting below the 50.0 no-change mark for the second month running and thereby signalling a further deterioration in business conditions in the manufacturing sector.
The latest decline was the most marked since the pandemic-related downturn seen in the third quarter of 2021.
"The Vietnamese manufacturing sector continued to struggle in December, in part due to subdued demand conditions in the key export markets of Mainland China, the EU and US. Securing new work is likely to remain difficult until there is a pick-up in these markets, with a number of firms indicating that they expect demand to remain subdued in the near-term at least," Andrew Harker, Economics Director at S&P Global Market Intelligence, said in a media release on Tuesday.
"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 try and stimulate demand. S&P Global Market Intelligence is predicting a rise of 6.8% in industrial production for 2023, which would represent a slowdown from 2022," Harker added.
After having dropped to a 14-month low in November, confidence in the year-ahead outlook for production remained relatively muted in December, despite improving
slightly.
Some panellists were concerned that challenging market conditions would persist during 2023.
On the other hand, a number of respondents expressed optimism that demand will recover, leading to growth of new orders and output.
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