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Vietnam's-Manufacturing-PMI-Shows-Modest-Recovery-in-March

Vietnam’s Manufacturing PMI Shows Modest Recovery in March

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Vietnam’s Manufacturing PMI Shows Modest Recovery in March

by Giezel Garcia
04/03/2025
in Tariffs & Duties

Vietnam’s manufacturing sector showed signs of improvement in March 2025, with the Purchasing Managers’ Index (PMI) rising to 50.5, signaling the first expansion in four months. The increase was driven by growth in output and new orders, according to the latest data from S&P Global.

The PMI, which measures the health of the manufacturing sector, rose from 49.2 in February to 50.5 in March, indicating a slight strengthening of business conditions as the sector began to recover towards the end of the first quarter of 2025.

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Manufacturing output increased for the first time in three months, marking the largest growth since August 2024. The rise in production was attributed to higher output levels and a rebound in new orders, though international demand remained weak. New export orders declined sharply, continuing a trend of weak global demand, particularly from Mainland China.

Despite the positive growth in output and orders, firms remained cautious. Business confidence showed signs of weakness, with manufacturers exercising restraint in hiring and purchasing. Employment levels decreased, and companies were careful about holding excess inventory. Supply chain disruptions continued, with longer supplier delivery times due to delays in receiving goods from overseas, although the delays were less severe compared to the previous month.

Input cost inflation also eased in March, prompting manufacturers to lower their selling prices for the third consecutive month. Although input prices increased slightly, the pace of inflation was the slowest in the past 20 months.

While the rise in new orders and production is a positive sign, the overall sentiment remained subdued, with firms cautious about the year-ahead outlook for production. The ongoing weakness in international demand, particularly for export orders, suggests that challenges in the global market may continue to affect the Vietnamese manufacturing sector in the near future.

Andrew Harker, economics director at S&P Global Market Intelligence, noted that while the sector showed improvement in March, caution remains prevalent among manufacturers, who are hesitant to expand their workforce or increase input procurement in response to the uncertain international environment.

Get the latest supply chain report news at The Supply Chain Report. Learn more about international trade with tools from ADAMftd.com.

#VietnamManufacturing #PMIRecovery #EconomicGrowth #ManufacturingSector #VietnamEconomy #MarchPMI #SupplyChainTrends

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