Growth in Vietnam's factory sector improved slightly in October as output and new orders increased and the rate of job creation reached a nine-month high, a private survey showed Monday.
The HSBC/Markit Manufacturing Purchasing Managers' Index (PMI) posted 51.0 in October, down slightly from the September’s reading of 51.7, but still signalling an overall improvement in operating conditions in the sector, Markit Economics said in a statement.
A reading above 50 indicates expansion, while one below 50 indicates the activity shrank during the month.
“Vietnam is on a gradual path to economic recovery,” the statement quoted Trinh Nguyen, Asia Economist at HSBC as saying.
“The manufacturing sector continues to expand on higher export orders, highlighting the country's competitiveness in labor intensive manufacturing,” Trinh Nguyen said.
New orders had been boosted by new export sales which increased at the fastest pace in six months, the statement said.
As firms raised production for the thirteenth month running in October, the sector witnessed a second successive monthly rise in employment, which was the joint-fastest so far this year.
Other key points of October included slowest rise in input prices since June 2013, and suppliers’ delivery times being shortened for the first time in ten months.
The sector is expected to “continue to grow on better external demand,” Trinh Nguyen said.
“What's left is for domestic sectors to kick in, allowing Vietnam to return to its long-run average,” she said.