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Output and new orders grew at the weakest rate in three months. While some businesses noted improved demand, many reported declining market conditions. Notably, export orders continued to fall for the second straight month, and at a faster rate.
Business confidence also fell to a 19-month low due to concerns about global economic instability. However, firms still expected higher output, anticipating improved orders and more stable economic conditions.
Inflationary pressures mounted, with input and output prices rising at the quickest pace since July 2024 due to raw material shortages and exchange rate fluctuations. Nonetheless, purchasing activity increased at the fastest rate in four months, as firms expected higher output in the coming months. However, companies remained hesitant to stockpile, leading to a reduction in stocks of purchases. Stocks of finished goods also decreased.
Manufacturers reduced staffing for the third straight month in December amid weak new order growth, causing backlogs of work to increase further and extending the current sequence of rising backlogs to seven months.
Andrew Harker, Economics Director at S&P Global Market Intelligence, commented: “It was a gloomy end to the year for Vietnamese manufacturers, with output and order book growth softening. Uncertainty in global markets continued to weigh heavily on business confidence, pulling it down to its lowest in over a year-and-a-half. This partly reflected uncertainty regarding the incoming US administration’s plans on tariffs. Further announcements on this issue in the new year will help to clarify the potential impact on Vietnam’s manufacturers.”
Gia Nghi
– 09:43 02/01/2025
