Vietnam PMI May 2023 – manufacturing purchasing managers index

Cimigo
Jun 01, 2023

Steepest decline in new orders for 20 months

  • Steeper reductions in output and new orders.
  • Input costs fall for first time in three years.
  • Employment and purchasing activity scaled back.

Cimigo Vietnam market research has collected the Vietnam PMI – manufacturing purchasing managers index since 2013. S&P Global compiles the Vietnam PMI S&P Global from responses to monthly questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

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Vietnam PMI findings

Vietnam PMI May 2023

The Vietnamese manufacturing sector moved further into contraction territory in May as the demand climate worsened again. Sharper falls in output and new orders were recorded, with firms scaling back their employment and purchasing activity accordingly. Meanwhile, business confidence continued to weaken.

There was further evidence of an easing of price pressures in the sector. Input costs decreased for the first time in three years, meaning that manufacturers were able to reduce their own selling prices in order to try to stimulate demand.

The S&P Global Vietnam Manufacturing Purchasing Managers’ Index™ (PMI®) dropped to 45.3 in May from 46.7 in April, thereby signalling a third successive monthly deterioration in operating conditions. 

Moreover, the latest decline in the health of the sector was the most marked since September 2021. There were widespread reports of customer demand weakness across the latest survey. The impact of this was most clearly felt with regards to new orders, which declined rapidly and to the greatest extent in 20 months. 

Difficulties in securing sales were also evident in export markets, with new business from abroad decreasing for the third month running. With new orders continuing to fall, firms also reduced output midway through the second quarter of the year. Production was down for the third successive month, and at a marked pace that was the fastest since January. Output decreased across each of the three broad categories of manufacturing, with the sharpest decline at intermediate goods producers.

Demand weakness caused a further hit to business confidence, which dropped for the third month in a row to the weakest since last November. Any lingering optimism was often due to hopes that a recovery would get underway in the sector in the coming months. 

Vietnam PMI Trend May 2023

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Some firms responded to lower workloads by cutting staffing levels. This, added to some reports of voluntary resignations, meant that employment decreased again in May, albeit to a lesser extent than seen in the previous survey period. Although firms reduced their operating capacity, they were still able to make substantial inroads into their backlogs of work in May. Outstanding business decreased at the sharpest pace since June 2021.

Manufacturers cut their purchasing activity at a marked pace, extending the current sequence of reduction to three months. In turn, stocks of purchases also decreased, and to the greatest extent in just under two years.

Stocks of finished goods were also down as firms adapted production to lower new orders. The fall was the first in three months. Reduced demand for inputs continued to mean a lack of pressure on supply chains. As a result, vendor performance improved for the fifth month running, and to the joint-largest extent since February 2015.

Waning demand also led suppliers to reduce their prices. Input costs decreased for the first time in three years as a result. The drop in input prices provided some leeway for firms to reduce their own charges in a bid to boost demand. Selling prices decreased for the second month running, and at a broadly similar pace to the previous survey period.

Approach

The S&P Global Vietnam Manufacturing PMI® is compiled by S&P Global from responses to monthly questionnaires sent to purchasing managers in a panel of around 400 manufacturers. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP.

Survey responses are collected by Cimigo Vietnam in the second half of each month and indicate the direction of change compared to the previous month. A diffusion index is calculated for each survey variable. The index is the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.

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Cimigo conducted a large, nationally representative demand forecasting study in Vietnam for us, including a discreet choice component, to assess demand for potential new male contraceptives in development to support funding decisions by The Bill & Melinda Gates Foundation. The research was additionally complex by linking interviews with men and separate interviews with their female partners. The Cimigo team was were professional, knowledgeable and adaptive through the process of understanding our needs and collaborating to find solutions that would work, resulting in a very successful study.

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I've had the pleasure to work with Richard and Cimigo over many years and across multiple markets. Cimigo was a key partner in our business decision making process including market entry strategy, brand positioning development, shopper insights, brand equity tracking, and consumer need state segmentation development. The Cimigo team are local market experts who understand consumer culture like no other. I would highly recommend them.

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Cimigo is the research agency that I appreciate for their expertise and customer service. Cimigo understand well the business context for each of project hence they can design the research to best fit with the objectives. The optimization on methodologies, sample size and questionnaire bring the value to the projects I have worked with them. Cimigo can go beyond data and give me valuable insights for each of research projects based on their knowledge and experience with the industry. All of these support me well to navigate the brand strategy in short term and long term.

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We partnered with Cimigo on assessing TET campaign launch focusing on improving booking through our platform. Cimigo, provided its customized campaign evaluation technique based on Cimigo Online Communities that fully meets our requirement in terms of type of respondents and expected timelines. The report provided insightful findings with benchmarks to identify the next course of action for launching the campaign. We will recommend Cimigo team and its Online communities for its quality reporting and scale of coverage.

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Cido have worked with Cimigo in Vietnam for more than 10 years. All our projects, both qualitative and quantitative, have been delivered in a timely manner with a high standard of quality throughout. Cimigo’s client service team has provided great support over the years which has ensured smooth project execution and helped us to deliver work on time and exceed our client’s expectations.

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I have partnered with Cimigo over the past 15 years. Most recently Cimigo engaged us to collaborate on an unusually tough new product development project, which was akin to selling ice to Eskimos. Cimigo bought alive the consumer, her shopping journey, her cooking rituals and potential brand promises. Cimigo inspired our creative team to build alternate brand propositions and accompanying package designs. Cimigo then went back to consumers to evaluate, iterate and optimise these in focus groups. The Doodle team were able to observe this process and subtly adjust the expression of the brand between focus groups. The result of this great collaboration was a winning brand proposition and packaging design that hit consumer needs head on whilst appealing to their hearts.

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We have worked together with Cimigo many times. The findings from Cimigo are factual, accurate & reliable. They deliver value from the voice of our customer so we can easily determine the next step. Working with Cimigo feels like not only building a partnership but a sense of family. Very amazing to work with Cimigo, they always go beyond our expectations.

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Cimigo digs deep to understand the key issues we need to address. Then, they quickly customize a highly suitable research approach to provide us the insights we need to achieve our breakthrough business targets. From tough questions to aha answers in just a few easy conversations!

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Our relationship with Cimigo goes back many years. We engaged Cimigo to provide an independent view on what our customers and potential customers think of our company. The insights from Cimigo were very helpful for us to better understand the Vietnam market and also in developing our brand manifesto.

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As a creative director I have used the services of Cimigo for the past 15 years when developing communications, so I know their style, innovations and resources well. Most recently we tested copy for print, out of home and digital communications to put an Australian colloquialism into a Vietnamese context. A job and budget so small I felt it was highly likely to fall through the cracks. I was astounded at their incredible response. From their advice and style of how we should present the stimulus material, to their cross-reference manoeuvres used in the testing. Their over-delivering response, was to an embarrassing level. We walked away with a clear winner and could present back to our client with confidence and clarity. Cimigo made us look great. Plus they even threw in a few extra insights on the awareness and perception of the product in Vietnam.

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I want to thank you again for your help and the great job the Cimigo team did in the home appliance project! The moderation was super and organisation upfront was also perfect.

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Cimigo have built and managed both our employee and customer experience programme since 2012. We have a complex suite of services with in-patient, out-patient, surgical, diagnostic, consultative and facilities to account for, all amongst patients who are naturally sensitive regarding their privacy and experience. Yet Cimigo have designed a system to measure customer experience across multiple languages and cultures and direct us in improving this experience. Our net promoter score (NPS) has grown as a direct result of changes implemented based on this direction and continuously listening to patient feedback. The NPS growth correlates directly to new patient numbers and improved profitability, as happier customers drives our business growth.

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We have worked with Cimigo recently and highly recommend them. Cimigo have made great recommendations on the price elasticity.

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Cimigo designed a customer experience programme for Coats that reached into Vietnamese, Chinese and Korean customers across various levels of seniority. Cimigo instilled the importance of the voice of the customer within our executive committee. This led to fundamental changes in our structure, services and speed to market. Significant investments were made behind these improvement programmes, for example in reducing delivery times and in managing specialised custom orders, which in turn have led to improved revenue streams and higher margin sales.

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Cimigo - The best “Glocal” market research firm in Vietnam with whom we have developed a great partnership since many years. While the quality of research and findings are of top standard, the added advantage being the local insights that Richard and his team are able to provide in helping us make important decisions.

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I respect Cimigo not only because of their dedication, meticulousness, and high-quality services but also how much they care about the local community here. I proposed the idea of doing a survey with the digital young generation on the topic of social impact and leadership. I wanted to identify, shape, and develop our content so that could really speak to the heart of the problems and empower young Vietnamese to take action on social impact in Vietnam. The Cimigo team agreed pro-bono to help without hesitation. The research findings are truly helpful in providing us a deeper understanding of our targeted audiences, what they need and are concerned about in life. The results show us how we can help them to achieve their goals and dreams. It is no longer a shot in the dark!

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Cimigo consistently carries out researches with international standards and consistently bring about truly mind opening local insights.

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Cimigo not only delivered an exceptional piece of qualitative research for us, but provided hugely valuable direction when it came to product development and market positioning which we have since implemented. We can’t wait to work with the team again.

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Pharmacity started a Brand Health Check with Cimigo in 2020 and we were immediately impressed with their great consultancy and supportive spirit. The study had interesting analysis and insights which helped us efficiently shape the marketing plan and direction moving forward. We are now working with Cimigo on a tracking basis to continuously monitor and foster our brand performance.

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When we were looking to develop one of the worlds the leading economic indicator in Vietnam, the Purchasing Managers’ Index™ (PMI®) Cimigo showed an immediate understanding of our needs and showed their understanding of the Vietnamese market. IHS Markit has now been working with Cimigo since 2013. Every month Cimigo continues to provide high quality data, a representative panel, on time data and great customer service. We look forward to many more years of working together.

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I have worked with CIMIGO on educational research for over 4 months. This is extremely impressive to me by the way CIMIGO approaches, cooperating and supporting me during the research launched. Specifically, the design for both qualitative and quantitative research are practical and logical with accurate questionnaires and appropriate interviews methodology for different respondents. Moreover, the outcomes of this research helps us to recognize our opportunities in the current English Language Training Market and understand profoundly our customer needs, behaviours and expectations when sending their children to us.

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Cimigo is and will be our strategic research agency. We are happy with your work and the way our projects are handled. You walked the extra mile and we are grateful for that.

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Just to say a huge thank you for all of the film footage. We are absolutely delighted with it all. The Vox Pops are really interesting and have turned out very well – those ladies were great at talking spontaneously. Cimigo did a great job. Thank you for your patience and perseverance with getting this off the ground.

Aimee Shear - Senior Research Executive

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We partnered up with the Cimigo team on what was a particularly challenging project – we were faced with numerous timeline delays and logistical concerns – yet Cimigo were incredibly accommodating through their patience, flexibility and commitment. Not only were Cimigo supportive during the set up of our project, but we were really impressed by the outputs delivered – Cimigo were insightful, rich and very comprehensive. Cimigo were brilliant partners to work with and we look forward to working with them again.

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Over the last 5 years I have worked with Cimigo on a wide array of projects, ranging from market segmentation to product testing. At all times, I found Cimigo to be swift in response and providing high quality insights and business recommendations applicable to our business. Furthermore, I am satisfied with Cimigo fieldwork quality despite the crunched timeline that we had in some projects. Overall, I highly recommend Cimigo for their professionalism.

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It was a pleasure working with Cimigo. Their expertise in consumer and market research was a significant benefit as they assisted our organization in understanding our market position in more detail and validating our hypothesis in go-to-market strategy. We were more than happy with the findings and would definitely recommend Cimigo.

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Cimigo is not the type of agency that "fill in the template", but it's customized as per the needs and expectations of Client. Cimigo makes research interesting by applying new approaches to address the business issue, for example, it's known by default that product test is CLT, but at Cimigo, we did group debate for deeper understandings and insights and that resulted as a winning product which is selling well in the market. Last but not least, Cimigo makes me understand that research is a journey, not just a project."
Cimigo is not the type of agency that "fill in the template", but it's customized as per the needs and expectations of Client. Cimigo makes research interesting by applying new approaches to address the business issue, for example, it's known by default that product test is CLT, but at Cimigo, we did group debate for deeper understandings and insights and that resulted as a winning product which is selling well in the market. Last but not least, Cimigo makes me understand that research is a journey, not just a project."

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We have worked with Cimigo over 2 projects in Vietnam. Cimigo has proven to be reliable being on top of the projects, managing different stakeholders and business objectives. They are flexible in terms of ways of working and are able to cope with last minute changes. The research findings (Quant + Qual) have helped us understand Vietnamese in a deeper level, allowing us to make clear decisions to be successful in the market. Thank you Cimigo team for supporting us.