Vietnam's factory activity contracts at lower space: survey

Source: Xinhua| 2020-06-01 17:10:59|Editor: huaxia

HANOI, June 1 (Xinhua) -- Vietnam Purchasing Managers' Index (PMI), which measures the economic health of the country's manufacturing sector, jumped to 42.7 in May from 32.7 in April, signaling a much softer decline in business conditions, a report compiled by the London-based global information provider IHS Markit revealed on Monday.

Disruption from the COVID-19 pandemic led to a sixth successive monthly decline in manufacturing production, said the report, noting that the fall was much softer than seen in April as some firms resumed operations.

Similar trends were seen with regards to new orders, with the rate of contraction remaining rapid but easing from the low seen in April. Some respondents highlighted a particular weakness in demand for new export orders.

Supply-chain disruption due to COVID-19 remained a key feature of the survey in May, with vendor delivery times lengthening markedly again. Panelists also reported particular difficulty in securing imported items.

However, with COVID-19 brought under control in Vietnam, there was tentative optimism among manufacturers that production would increase over the coming year.

"The success Vietnam has had in bringing the COVID-19 outbreak in the country under control means that the economy can begin along the road to recovery," commented Andrew Harker, economics director at IHS Markit, noting that the return to growth will likely be gradual, with little support coming from export markets in the near-term at least as the pandemic continues to affect large parts of the world.

A PMI reading above 50 indicates an expansion of the manufacturing sector compared to the previous month, below 50 represents a contraction, while 50 indicates no change. Enditem