HO CHI MINH CITY, Sept. 3 (Xinhua) -- Latest data suggested another slight loss of momentum in the Vietnamese manufacturing sector as output growth slowed and new orders fell slightly during August, according to the Hong Kong and Shanghai Banking Corporation (HSBC).
In a report released here on Wednesday, the bank said the Purchasing Managers' Index (PMI), a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing sector, posted 50.3 in August, down from 51.7 in July, falling for the fourth consecutive month to signal the weakest improvement in business conditions since November 2013.
The rate of growth in manufacturing output eased again in August, and was the slowest in the current 11-month sequence of expansion.
Behind the weaker rise in output was a fall in new orders, the first in nine months. That said, the reduction was only marginal. New export business also decreased, ending a five-month sequence of expansion.
Falling new orders led backlogs of work to decrease for the fourth successive month, albeit only modestly. Lower new business also impacted on stocks of finished goods, which increased at the strongest pace in 13 months. Some panelists also attributed the accumulation of inventories to delays in delivering products to clients.
Staffing levels in the sector were unchanged on average during August. Some panelists reported having taken on extra staff to help support a rise in production, but others reported employee resignations, sometimes in search of increased salaries elsewhere.
Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC said: "The slowdown of activity is expected, as new orders are dragged down by weak external and internal conditions."
"A buildup of inventories and weakening of new orders suggest that output will remain subdued in the months ahead. We expect output to rebound in Q4 on better demand," said Nguyen.
The HSBC Vietnam Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 400 manufacturing companies on five of individual indices of new orders, output, employment, suppliers' delivery times, and stock of items purchased.