Vietnam manufacturing starts 2017 firing on all cylinders The manufacturing sector starts the new year amid a surge in new orders with the Industrial Production Index having increased 8.30% in December, 2016 over the same month in 2015, reports the General Statistics Office. The economy is starting the year on a high note with the manufacturing sector showing signs of faster growth, says the GSO. The gain is within economists’ expectations for the index that has averaged 9.09% from 2009 until 2016. The fact that the end of the year figure is slightly below the average simply reflects that low energy prices are weighing the index down. The index, says the GSO, shows that the country’s manufacturing sector remains solid. It is also in alignment with the Purchasing Managers Index, which indicates the sector ended calendar year 2016 firing on all cylinders on the back of a surge in new orders, output and employment. The PMI – a composite single-figure indicator of manufacturing performance – posted 52.4 in December, down from November’s reading of 54.0 but still signalling a sturdy monthly improvement in the health of the manufacturing sector. In addition, the PMI shows that manufacturing is on a roll with operating conditions having strengthened for 13 consecutive months. According to surveyors compiling the PMI, manufacturing respondents in Vietnam say higher new orders in the latter months of 2016 is the main factor leading to production growth in December. In fact, new manufacturing export orders in December rose at the fastest pace in the PMI survey’s nearly 5-year history and were equal with the first month of data collection in March 2011. Although higher new orders put pressure on capacity of some manufacturers, a slight slowdown in the rate of expansion enables firms to keep on top of and better manage their workloads. Another upbeat sign for the manufacturing sector in Vietnam on the cusp of the new year 2017— overall backlogs of work have decreased for the first time in three months. In addition, manufacturers report they are continuing to boost staffing levels throughout the Southeast Asian country for December, the ninth consecutive month in a row they have done so. They also report that requests for faster deliveries of purchased items were met by those in the supply chain in December as lead times shortened for the fourth month running, helping to keep inventory levels on track and at their peak. VOV