Vietnam manufacturing growth accelerates to 15-month high in October

Investing.com -- Vietnam’s manufacturing sector saw a significant improvement in growth momentum at the start of the final quarter of 2025, with the S&P Global Vietnam Manufacturing PMI rising to 54.5 in October from 50.4 in September.

The October reading signaled the strongest improvement in business conditions since July 2024, with all five components of the headline PMI contributing to the upward movement.

New orders increased for the second consecutive month at a sharp pace, expanding at the fastest rate since July 2024 as customer demand improved. New export orders also rose for the first time in a year, albeit slightly.

In response to higher new orders, manufacturers ramped up production, which increased at the sharpest pace since July 2024. Output has now risen for six consecutive months.

The stronger business conditions led to renewed job creation, with employment expanding for the first time in just over a year. Companies added workers partly in response to emerging capacity pressures, as backlogs of work increased for the first time in ten months at the fastest pace in over three-and-a-half years.

Business confidence strengthened to a 16-month high, with firms expressing optimism that new orders will continue to rise alongside plans to expand production capacity.

Purchasing activity increased for the fourth consecutive month, leading to the first accumulation of input stocks in just over two years. Meanwhile, stocks of finished goods decreased slightly as firms used inventories to help meet order requirements.

Inflationary pressures intensified during October, with input costs rising at the sharpest rate since July 2024. Around 27% of survey respondents reported higher raw material prices and supply shortages. This led to faster output price inflation, which reached a 40-month high.

Supplier delivery times lengthened solidly, with the greatest delays since July. Some firms linked backlog accumulation and longer lead times to stormy weather conditions and associated flooding.

Andrew Harker, Economics Director at S&P Global Market Intelligence, noted: "The Vietnamese manufacturing sector moved up a gear in October, seeing much stronger increases in output and new orders during the month. Positively, the strength of the expansions were sufficient to enable firms to take on extra staff and build inventories of inputs."

He added that while there is positive momentum in the sector, it remains to be seen whether these growth rates can be sustained in the coming months, particularly as inflationary pressures continue to build.

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