 |
Output and new orders grew at the weakest rate in three months. While some businesses noted improved demand, many reported market conditions were softening. Notably, export orders fell for the second month running and at a quicker rate.
Business confidence also dipped to a 19-month low as concerns mounted over global economic instability. However, firms still expected output to rise over the coming months, supported by forecasts of improved orders and more stable economic conditions.
Inflationary pressures built, with input and output prices rising at the quickest rates since July 2024, linked to raw material shortages and exchange rate movements. Nonetheless, purchasing activity increased at the fastest pace in four months, as firms expected higher production in the coming months. However, companies were still hesitant to stockpile, leading to a reduction in stocks of purchases. Stocks of finished goods also decreased.
Manufacturers cut staff for the third month running in December amid weak new order growth, causing backlogs of work to increase further. This extended the current sequence of rising outstanding business to seven months.
Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “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
“Vietnam’s Manufacturing Sector Loses Momentum in Late 2024”
The Vietnamese manufacturing sector faced headwinds in the final month of 2024, as the Purchasing Managers’ Index (PMI) dipped from 50.8 in November to 49.8 in December, slipping below the 50-point threshold for the first time in three months. This indicates a mild deterioration in business conditions, presenting a challenging landscape for the industry as the year drew to a close.
“PMI Surges to 50.8 in November, Marking the Second Consecutive Month of Improvement Post-Yagi”
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) for Vietnam remained above the 50.0 no-change mark in November, signaling a second consecutive monthly improvement in business conditions following the disruption caused by Storm Yagi in September. However, with the index falling from 51.2 in October to 50.8, the health of the sector strengthened only modestly.
The Interest Rates Will Stay Low
“Banks report a resurgence in credit demand since mid-August, prompting many to adjust their deposit rates for select tenors to attract funds and meet this demand. However, lending rates will remain low.”
Positive Orders from Q3 and Q4: Textile Industry Aims for 8-10% Growth
In 2024, the apparel industry is experiencing a relatively stable order situation, with most businesses securing orders extending through September and October. While there has been a carry-over effect on pricing from 2022-2023, resulting in significant decreases for many products, the industry is optimistic about maintaining a steady flow of orders for the foreseeable future.
