Viet Nam’s Manufacturing Purchasing Managers’ Index (PMI) rose from 53.9 points in the previous month to reach 56.5 points in November, according to the latest survey from Nikkei’s IHS Markit, released on Monday.

Manufacturing business conditions during November improved to one of the greatest heights in the near eight-year history of the survey.

The consumer goods sector was the strongest performer of the three broad sectors covered in the latest survey period, witnessing the fastest rises in output, new orders and employment.

New orders increased sharply in November, with the rate of expansion quickening for a second month in a row. Strong growth of new orders encouraged manufacturers to increase production. Moreover, the rate of output growth quickened to the fastest since March 2011.

Output looks set to increase further over the coming year as strong demand has boosted manufacturer confidence. Sentiment jumped from October to the highest level since February 2016.

Firms responded to greater workloads by taking on extra staff at a rapid rate. In fact, the pace of job creation was the fastest in the survey’s history, surpassing the previous record seen in June.

Manufacturers increased their stocks of both inputs and finished goods at record rates as firms responded well to bigger orders and prepared for likely rises in sales in the coming months. The accumulation of pre-production inventories was helped by acceleration in the rate of purchasing activity growth.

Higher raw material prices resulted in a further increase in input costs in November, the most marked change in three months. Rising cost burdens led manufacturers to increase their selling prices for the first time in three months.

A number of panellists mentioned that material shortages had contributed to higher prices for inputs, with supply issues leading some firms to report longer delivery times for inputs. Other manufacturers reported their suppliers had been prepared and reduced waiting times. Overall, vendor delivery times were largely unchanged.

Andrew Harker, Associate Director of IHS Markit, said the Vietnamese manufacturing sector continued to defy recent signs of slowing demand elsewhere in the global economy during November, seeing a strong and accelerated increase in new orders and a near-record rise in output. Moreover, firms seem confident the good news will continue, prompting them to build inventories and take on staff at the sharpest rates seen in the near eight-year survey history so far. — VNS