Business Updates in Vietnam on May 11, 2024

The Purchasing Managers’ Index (PMI) of the Vietnamese manufacturing sector has rebounded above the 50.0 no-change mark, signaling a positive outlook for businesses in the country. According to the recent data released by S&P Global, the PMI rose to 50.3 from 48.8 in March, indicating a slight improvement in the health of the manufacturing sector.

Andrew Harker, the economics director at S&P Global Market Intelligence, noted that Vietnam’s manufacturing sector has seen an increase in new orders in April following recent weakness. This uptick in new orders could lead to an increase in the number of workers returning to work, fostering hopes for a more stable environment for manufacturers to plan production and allocate resources efficiently.

Data from the General Statistics Office (GSO) revealed that the number of newly established firms in the first four months of the year surpassed 51,550, marking the highest number to date. However, while the average registered capital per enterprise has increased, it has not yet returned to pre-pandemic levels, indicating caution among businesses in investing in production and business activities.

Despite the positive indicators, challenges remain, with the number of businesses exiting the market still higher than those being established or returning. This imbalance highlights the hurdles facing the production and business environment in Vietnam.

Nguyen Bich Lam, an economic expert and former GSO Director-General, emphasized the importance of improving the business climate and revitalizing private investment as key drivers of long-term economic growth. As Vietnam navigates through economic uncertainties, the focus on stability and growth in the manufacturing sector will be crucial for sustained development.