The Purchasing Managers' Index (PMI) for Vietnam’s manufacturing sector rallied above the 50-level in April, dividing growth from contraction, fuelling hopes for a stable business environment.

The PMI, recently released by S&P Global, rose to 50.3 last month from 48.8 in March, signalling a marginal improvement in the health of the manufacturing sector, marking the third consecutive increase in the past four months.

S&P Global Market Intelligence’s economics director, Andrew Harker stated that Vietnam’s manufacturing sector registered a rise in new orders last month following recent weakness. 

Consequently, the number of people returning to work may also increase, Vietnam Plus reports.

With these indicators in mind, Harker stated that he expects a more stable environment, which will assist manufacturers in planning production and allocating resources more efficiently.

Furthermore, data published by the General Statistics Office (GSO) reveals that in April, 15,300 new enterprises entered the market. This brings the total number of newly established firms in the first four months of the year to over 51,550, exceeding the average of the past two years and reaching the highest number on record.

Yet, despite the increase in the average registered capital per enterprise, it has not yet reached the level of 12.8 billion VND ($512,000) recorded in the 2019-2022 period. This indicates that businesses are still cautious about investing in production and business activities.

In addition, the volume of businesses resuming operations throughout the country between January and April hit 29,700, a 2.4% year-on-year increase.

However, according to Nguyen Bich Lam, an economic expert and former GSO Director-General, the long-term economy cannot solely rely on public investment. 

He stressed the need for implementing solutions to enhance the business climate and stimulate private investment, which serves as the main and most crucial driver of growth.