Vietnam’s Purchasing Managers’ Index (PMI) continued to rise in February, posting growth and confirming that business conditions are improving, according to IHS Markit.

After reaching 53.7 points in January, the PMI was 54.3 points in February. Output and new orders rose at the fastest rate for ten months and the manufacturing sector continued to recover.

Growth improved as it was supported by stronger customer demand. New orders surged, with growth at a ten-month high. The improvement in international demand in February also led to a significant increase in exports. Input purchases rose sharply as companies tried to import goods to support production growth.

According to Mr. Andrew Harker, Economic Director at IHS Markit, Vietnam’s manufacturing sector continued to demonstrate resilience in the face of Covid-19 in February, with both demand and production being growth drivers.

However, supplier delivery times continued to be long due to a scarcity of raw materials and staff shortages, together with ongoing difficulties in international shipping. Input prices continued to increase strongly during the month, reflecting rising raw material costs, with the sharp increase in the oil price adding to transportation costs. Enterprises still have difficulties convincing a sufficient number of workers to return and tackle backlogs, while raw materials are still scarce.