Wokers in a Vietnamese factory. The country's PMI jumped to 51.3 in December, according to Nikkei. — VNA/VNS Photo Vu Sinh

HA NOI (Biz Hub) — The Purchasing Managers' Index (PMI) in Viet Nam, an indicator of manufacturing performance, increased from 49.4 in November to 51.3 in December, a Nikkei report, released on January 4, said.

The first increase in new orders in four months supported the strengthening of the manufacturing sector, amid improving client demand. New export orders also grew in December, the first solid expansion since May, the report said.

The registration of more new enterprises also was a boosting factor in December. Meanwhile, the consumer goods sector also grew, the report said.

"Employment also increased again in the final month of the year. Staffing levels increased for the eighth time in the past nine months, albeit only marginally," it said.

However, the report said there was still evidence of spare capacity at manufacturers as work backlog fell for the sixth time in the past seven months.

Falling input prices were recorded in the sector in December, with firms linking this to lower raw material costs, especially the oil price.

Following the fall in input prices, manufacturers cut their selling prices. The prices of products have fallen every month since October 2014, with the rate of deflation remaining solid in the latest survey period, the report said.

It said Vietnamese manufacturers increased their input purchases for the first time in four months in response to increased new business. This led to a marginal accumulation of stocks, following a fall in November.

"It was something of a relief to see the Vietnam PMI bounce back above the 50.0 no-change mark in December as it suggests that the recent soft-patch experienced both at home and in the wider region may have passed its worst point. A particular positive from the latest survey was a return to growth in new export orders after six successive months of decline," Andrew Harker of Markit, which compiled the survey, said.

"Firms will be hoping to see demand pick up further as we move into 2016," the analyst said. —VNS