HANOI, Aug. 1 (Xinhua) -- The Vietnamese manufacturing sector remained in contraction territory but showed some signs of stabilization, according to a report released by S&P Global Market Intelligence on Tuesday.
Softer declines were seen in output, new orders and employment, while business confidence picked up in the opening month of the third quarter of the year, the report said.
The S&P Global Vietnam manufacturing Purchasing Managers' Index (PMI) rose to 48.7 in July from 46.2 in June, signaling a fifth successive monthly deterioration in operating conditions, albeit one that was only modest and the weakest in this sequence.
"There were signs that demand may be stabilizing as new orders fell at the softest pace in five months. Firms will be hoping that this may feed through to renewed growth of orders in the months ahead," said Andrew Harker, economics director at S&P Global Market Intelligence.
New orders decreased only marginally in July amid some signs of demand stabilizing. Manufacturers signaled that demand remained subdued overall, particularly in export markets.
Highlighting the particular weakness internationally, the report said, new export orders fell much more quickly than total new business, adding that some firms pointed to declines in new orders from European customers.
Business confidence peaked at a four-month high in July, but remained relatively muted. Firms hope that an eventual recovery in customer demand will feed through to renewed production growth but remain concerned by the current challenges in securing new business, the report said.
The PMI index measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion on a monthly basis in the sector, and a reading below implies contraction. ■