Manufacturing growth slows in December - PMI

The manufacturing sector is hit by the double whammy of a new sales and service tax and lower ringgit. – EPA pic

The manufacturing sector is hit by the double whammy of a new sales and service tax and lower ringgit. – EPA pic

According to the latest survey from Nikkei's IHS Markit, released on Wednesday, Vietnam Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - was 53.8 in December, signalling solid improvement in the health of the manufacturing sector.

This was higher than the 50.4 recorded in November when it hit a 28-month low, and above the 50.7 reading economists were expecting.

Data Friday showed the housing market had its worst 12 months since 2013 previous year, consumers remained reticent about borrowing and a gauge of services, the largest part of the economy, stayed sluggish.

The slowdown, the index said, reflected "softer rises" in commercial and housing activity in December, with commercial building the worst performing category.

"Stocks of purchases and finished goods both rose at near survey-record rates, while stock-piling by customers at home and overseas took new orders growth to a 10-month high".

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "The pick-up in the PMI in December suggests that preparations for Brexit are helping manufacturers to keep their heads above water during the current global slowdown".

Five US Federal Reserve (Fed) indexes of regional manufacturing all slumped in December, the first time they've fallen in unison since May 2016.

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A Markit survey of American manufacturers also showed the slowest growth in December in 15 months, reflecting a dip in confidence among executives about how their businesses will perform in the new year.

Trade tensions between the U.S. and China are hurting demand across Asia's manufacturing hubs and export-oriented European economies including Germany.

The BoE figures showed the annual growth rate in unsecured consumer lending had slowed to 7.1 percent in November from 7.4 percent in October, the smallest increase since March 2015.

Mrs May is also seeking to win fresh assurances from the European Union over the terms of her agreement, which is set to be voted on by MPs (BSE: MPSLTD.BO - news) within the next three weeks. There were reports that lower prices for oil-related inputs had helped to moderate the overall rate of cost inflation in December.

Softer rises in average prices charged were widely linked to competitive pressures and weaker input cost inflation during December.

"Survey respondents also noted that the strengthening infrastructure pipeline is set to become a key engine of growth in 2019, despite concerns about possible delays to the delivery of major projects".

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