China’s manufacturing PMI eased slightly to 51.9 per cent in March

The purchasing managers’ index (PMI) for the manufacturing sector was 51.9 percent in March, down 0.7 percentage points from the previous month and above the critical point, indicating that the manufacturing sector is expanding.

The non-manufacturing business activity index and composite PMI output index came in at 58.2 percent and 57.0 percent, respectively, up from 1.9 and 0.6 percentage points last month. The three indexes have been in the expansion range for three consecutive months, indicating that China’s economic development is still stabilizing and picking up.

The author learned that the chemical industry had a good first quarter this year. Some enterprises said that because many customers had more inventory demand in the first quarter, they would “consume” some inventory in 2022. However, the overall feeling is that the current situation will not continue, and the market situation in the following period of time is not very optimistic.

Some people also said that the business is relatively light, lukewarm, although there is a clear inventory, but the feedback this year is not necessarily optimistic than last year, that the following market is uncertain.

A chemical company boss feedback positive, said the current order is full, sales are much more than the same period last year, but still cautious about new customers. The international and domestic situation is grim, with a sharp decline in exports. If the current situation continues, I am afraid that the end of the year will be difficult again.

Businesses are struggling and times are hard

7,500 factories were closed and disbanded

In the first quarter of 2023, Vietnam’s economic growth rate hit a “screeching brake”, with both success and failure in exports.

Recently, the Vietnam Economic Review reported that the shortage of orders by the end of 2022 is still continuing, leading many southern enterprises to reduce production scale, lay off workers and shorten working hours…

At present, more than 7,500 enterprises have registered to suspend operations within a time limit, to be dissolved, or to complete dissolution procedures. In addition, orders in key export industries such as furniture, textiles, footwear and seafood mostly fell, putting considerable pressure on the export growth target of 6 percent in 2023.

The latest figures from Vietnam’s General Bureau of Statistics (GSO) confirm this, with economic growth slowing to 3.32 per cent in the first quarter of this year, compared with 5.92 per cent in the fourth quarter of 2022. The 3.32% figure is Vietnam’s second-lowest first-quarter figure in 12 years and almost as low as it was three years ago when the pandemic began.

According to statistics, Vietnam’s textile and footwear orders fell 70 to 80 percent in the first quarter. Shipments of electronic products fell 10.9 percent year on year.

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In March, Vietnam’s largest shoe factory, Po Yuen, submitted a document to authorities about implementing an agreement with nearly 2,400 workers to terminate their labor contracts because of difficulties in getting orders. A large company, previously unable to recruit enough workers, is now laying off a large number of workers, visible leather, footwear, textile companies are really struggling.

Vietnam’s exports plunged 14.8 per cent in March

GDP growth slowed sharply in the first quarter

In 2022, Vietnam’s economy grew by 8.02% year on year, a performance that exceeded expectations. But in 2023, “Made in Vietnam” has hit the brakes. Economic growth is also slowing as exports, on which the economy depends, shrink.

The slowdown in GDP growth was mainly due to reduced consumer demand, with overseas sales shrinking 14.8 per cent in March from a year earlier and exports sliding 11.9 per cent in the quarter, GSO said.

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This is a far cry from last year. For the whole of 2022, Vietnam’s exports of goods and services amounted to $384.75 billion. Among them, the export of goods was 371.85 billion US dollars, up by 10.6% over the previous year; Exports of services reached $12.9 billion, up 145.2 percent year on year.

The global economy is in a complex and uncertain state, suggesting trouble from high global inflation and weak demand, GSO said. Vietnam is one of the world’s largest exporters of clothing, footwear and furniture, but in the first quarter of 2023, it is facing “unstable and complex developments in the world economy.”

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As some countries tighten monetary policy, the world economy slowly recovers, reducing consumer demand in major trading partners. This has had an impact on Vietnam’s imports and exports.

In an earlier report, the World Bank said commodity – and export-dependent economies such as Vietnam were particularly vulnerable to a slowdown in demand, including for exports.

Wto updated forecasts:

Global trade slows to 1.7% in 2023

It’s not just Vietnam. South Korea, the canary in the global economy, also continues to suffer from weak exports, adding to concerns about its economic outlook and a global slowdown.

South Korea’s exports fell for the sixth straight month in March due to weak global demand for semiconductors amid a slowing economy, data released by the Industry Ministry showed, adding that the country has suffered a trade deficit for 13 consecutive months.

South Korea’s exports fell 13.6 per cent year on year to $55.12bn in March, the data showed. Exports of semiconductors, a major export item, plunged 34.5 percent in March.

On April 5, the World Trade Organization (WTO) released its latest “Global Trade Prospects and Statistics” report, predicting that the growth of global goods trade volume will slow to 1.7 percent this year, and warned of risks from uncertainties such as the Russia-Ukraine conflict, geopolitical tensions, food security challenges, inflation and monetary policy tightening.

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The WTO expects global trade in goods to grow by 1.7 per cent in 2023. That is lower than the 2.7 per cent growth in 2022 and the 2.6 per cent average over the past 12 years.

However, the figure was higher than the 1.0 per cent forecast made in October. A key factor here is China’s loosening of controls on the outbreak, which the WTO expects will unleash consumer demand and in turn boost international trade.

In short, in its latest report, the WTO’s forecasts for trade and GDP growth are both below the average of the past 12 years (2.6 per cent and 2.7 per cent respectively).