Saturday , April 20 2024

Industrial production shows glimpses of recovery


The manufacturing sector is showing signs of revival but a full-blown recovery is only likely in the second half of this year at the earliest, analysts said.

With an estimated 80,000 factory workers laid off in the first two months amid plunging orders since the third quarter last year, industrial production faces challenging times.

But this month some factories are seeing new opportunities.

Pham Quang Anh, CEO of garment company Dony, said there is great potential to export to the U.S. and Middle East, and orders are set to flow in from the second quarter onwards.

But the company would not start hiring right away, he said.

“Businesses will prioritize overtime for existing employees as many of them want higher incomes.”

Companies are keeping payrolls slightly short to ensure they would not have to fire many workers if orders plummet again like they did last year and earlier this year.

At a recent furniture fair Tran Duc Corporation, a company with 2,000 workers which supplies furniture to hotels, met with 57 potential customers and 13 of them are likely to sign purchase contracts.

Vietnam’s Purchasing Managers’ Index, which measures manufacturing activity, rose to 51.2 points in February, according to S&P Global. A score of more than 50 indicates expansion.

Recruitment company Adecco said in a recent report: “The recovery is only starting. It would take until the second half of the year for recruitment to be vibrant again.”

Its survey found that 47% of businesses want to maintain their current staff size and 43% want to increase it.

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