The Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI) in the final month of 2015 rose to 51.3 from 49.4 in November. A reading above 50 indicates growth in the sector.
The Nikkei said the sector’s growth was helped by the first rise in new orders in four months thanks to improving client demand.
New export orders also returned to growth in December but there was still evidence of spare capacity at manufacturers as backlogs of work decreased for the sixth time in the past seven months.
Growth was also seen in December employment with staffing levels increasing for the eighth time in the past nine months, although only slightly.
According to the Nikkei, input prices continued to go down in December as a result of falling raw material costs, leading manufacturers to lower their selling prices accordingly.
Andrew Harker with Markit, which compiled the data, said it was something of a relief to see the Vietnam PMI bounce back above the 50 mark as it suggested that the recent soft-patch experienced both at home and in the wider region may have passed its worst point.
Harker said overall 2015 was a mixed year for the sector, with strong growth in the first half followed by a slowdown and broad stagnation in the second half. He said firms would be hoping to see demand pick up further in 2016.
