New orders rebound, manufacturing PMI exceeds...

After three consecutive months below the 50-point threshold, Vietnam's manufacturing sector returned to growth in March as both output and total new orders increased.

According to the latest announcement of the Purchasing Managers' Index (PMI) by S&P Global, in March 2025, the Vietnam manufacturing PMI index recorded a level above the 50-point threshold for the first time in 4 months, signaling an improvement in business conditions at the end of the first quarter of 2025.

The PMI rose to 50.5 from 49.2 in February, indicating a strengthening of the manufacturing sector, according to S&P Global. Manufacturing output rose for the first time in three months and the largest increase since August 2024.

The increase in output partly reflected an improvement in the availability of goods, but also reflected a return to growth in new orders after two months of decline, the S&P Global survey showed.

New orders rose amid signs of improving customer demand, but the increase was only modest amid continued weakness in international demand.

In fact, new export orders fell sharply and at the fastest pace since July 2023. New orders from abroad have now fallen for five consecutive months.

Some respondents reported a decline in orders from China. While output and total new orders rebounded, companies remained less confident about the outlook for output this year.

Although business sentiment remained upbeat amid rising new orders and hopes of a stabilising demand situation, the level of optimism remained below the index's historical average.

Manufacturers were cautious in hiring and purchasing in March, S&P Global reported. The number of workers fell for the sixth straight month, and was blamed on a recent slowdown in demand and employee turnover. However, the decline in workers was the smallest in 2025 so far.

Meanwhile, purchasing activity fell for the first time in four months as firms said a recent period of input buying had helped to build sufficient inventories to support production demand.

As a result, inventories of purchases fell, although the decline was the least significant since August last year. Stocks of finished goods also fell, with some reports suggesting that companies were reluctant to build up too much inventory.

For input buyers, suppliers continued to experience longer delivery times, which were attributed to delays in receiving goods from overseas. However, the decline in vendor performance was much less pronounced than in February and the smallest in seven months. Some respondents reported that suppliers had more inventory available and faster shipping.

While higher prices for some imported goods pushed input prices up further in March, weaker demand for inputs prompted some suppliers to cut prices. Overall, input costs rose only slightly, and the rate of increase was the slowest in the current 20-month period of price increases.

“Efforts to maintain competitiveness have forced manufacturers in Vietnam to reduce their selling prices for the third consecutive month. However, the reductions have been modest,” the report assessed.

According to Andrew Harker, Chief Economist at S&P Global Market Intelligence, Vietnam’s manufacturing sector started to perform more strongly in March, with output and new orders rising for the first time since early 2025. Hopefully, companies will be able to continue to do better in the coming months based on these improvements.

However, the expert also said that manufacturers are still quite cautious, thus hesitant to hire more staff or buy more inputs. This may reflect an uncertain international environment, with new export orders falling sharply in March.

In fact, global trade is expected to experience unpredictable fluctuations due to tensions related to recent US tariff policies.

Vietnam has a significant trade surplus with the US, so it is more or less affected. In this context, businesses need to proactively develop response plans and diversify their markets to adapt to these fluctuations.

Source: https://baodaknong.vn/so-luong-don-dat-hang-moi-tang-tro-lai-pmi-nganh-san-xuat-vuot-nguong-50-diem-247936.html