After showing signs of recovery in the previous month, Vietnamese manufacturing activity plunged in March, with renewed falls in output, new orders and employment amid weak demand, according to a report by S&P Global.
The report noted that the drop in overall new orders was the fourth in the past five months, while new business from abroad dipped for the first time in three months.
Similar to the picture for new orders, manufacturing output also dropped in March, following a rise in February, though the reduction was only modest.
Investment goods production increased, but falls were seen in the consumer and intermediate goods categories, said S&P Global, adding that stocks of finished goods were broadly unchanged over the month, ending a five-month sequence of depletion.
Some firms saw post-production inventories rise amid a drop in new orders, while others reported that lower production volumes had caused stocks to fall.
With output requirements softening, manufacturers responded accordingly by reducing their purchasing activity and employment, the latter also impacted by staff resignations.
Despite signs of weakness at the end of the first quarter of 2023, manufacturers remained optimistic that output will increase over the coming 12 months.
Business sentiment dipped from February but was still the second-highest in five months amid hopes for demand improvements and stable market conditions. Some firms also pointed to business expansion plans.
Commenting on the situation, Andrew Harker, Economics Director at S&P Global Market Intelligence, said “The softening of conditions in March will hopefully be just a blip, however, with firms remaining confident in the year-ahead outlook.”
