Business conditions in the Vietnamese manufacturing sector improvedslightly in October as output and new orders increased and firms took onextra staff at the fastest rate since January, according to thePurchasing Managers’ Index (PMI) report by the Hong Kong and ShanghaiBanking Corporation (HSBC) and Markit Economics.

The report, released on November 3, pointed out that the rate ofinflation slowed for the third month in a row, and enterprises were ableto pass on cost reductions to their clients by lowering output prices.

Meanwhile, manufacturers in Vietnam saw theamount of new orders increase for the second month running, following amarginal decline in August, although the latest increase was weaker thanin September, the report said.

According to expertsinvolved in the report, the number of orders was boosted by exportsales that increased rapidly over the last six months.

The report attributes the increase in productivity for the 13 thmonth running to the increase in orders in October, even though thegrowth rate in production was minimal.

Increasedoutput requirements were the main driver behind a consecutive monthlyrise in employment, the report said, adding that the job creation ratewas the fastest so far this year.

This addedcapacity enabled manufacturers to work through outstanding business,with backlogs of work decreasing for the sixth month in a row, thereport said.

Trinh Nguyen, Asia Economist at HSBC, said Vietnam was on a gradual path to economic recovery.

The October PMI shows that the manufacturing sector continues toexpand thanks to higher export orders, highlighting the country’scompetitiveness in labour-intensive manufacturing, he said.

The employment index grew sharply, a positive sign of manufacturers’ outlook for future demand, he assured.-VNA