The Purchasing Managers’ Index (PMI) in August fell from 51.7 in July to 50.3 as output growth slowed and orders fell slightly during the surveyed month.
HSBC said the decline in August PMI signalled the weakest improvement in business conditions since November 2013 and was the slowest in the current 11-month sequence of expansion.
It added that the fall in new orders was the first in nine months, but noted that this was only a slight drop.
During August, there was a marked rise in input costs, due to increased transport costs linked to higher fuel costs and the enforcement of weight restrictions on trucks.
However, the rise in input prices was the slowest since April, HSBC said.
Hiring in August was unchanged on average, with some companies reporting recruiting more employees to deal with a rise in production, while others reported resignations in search of higher salaries.
Commenting on Vietnam’s August PMI, HSBC economist Trinh Nguyen said the slowdown was expected as new orders were dragged down by both weak external and internal conditions.
She expected output to rebound in the fourth quarter on stronger demand, but noted output would remain subdued in the months ahead as suggested by rising inventories and the weakening of new orders.
