Vietnam Manufacturing PMI stands at 51.8 in June, signaling solid start to H2

The reading was down from 52.8 in May but remained above the 50.0 no-change mark, indicating continued improvement in the sector’s health. Business conditions have now strengthened on a monthly basis for the past year.

The report outlined that after returning to growth in May, new orders increased again in June as panelists reported improvements in customer demand. The latest expansion was solid, albeit softer than in the previous survey period. New export orders also rose, albeit only slightly and to a smaller extent than total new business.

The latest rise in new orders helped to support sustained growth of manufacturing production. Output rose for the fourteenth successive month, and at a marked pace that was the fastest since February.

Higher new orders and rising output requirements encouraged manufacturers to expand their purchasing activity for the second month running in June. As was the case with output, the rate of growth was slightly quicker than that seen in May.

Despite another marked rise in purchasing, stocks of inputs decreased at a sharp and accelerated pace in June. In fact, the fall was the most marked for a year. In some cases, inputs had been used to support production growth rather than being held in stock, while challenges importing goods were also mentioned.

Input costs continued to rise sharply in June, but the rate of inflation was much softer than that seen in May and the lowest since the start of the year. Where input prices increased, panelists linked this to material supply shortages and higher transportation costs. Similarly, the rate of output price inflation also eased in June and was at a six-month low.

Manufacturers were optimistic that output will rise over the coming year, and confidence ticked up to the highest in four months. Hopes for further increases in new orders, new product development and efforts to expand operations were among the factors supporting optimism. Nevertheless, sentiment stayed below the level seen prior to the outbreak of war in the Middle East.

Andrew Harker, economics director at S&P Global Market Intelligence said, "The Vietnamese manufacturing sector ended the first half of 2026 on a positive note, with sustained expansions of new orders and output recorded. Encouragingly, anecdotal evidence from the latest PMI survey suggested that growth was more driven by improving customer demand than the efforts to build safety stocks which supported growth in May. Reduced stockpiling efforts potentially reflected a marked easing of inflationary pressures during the month”.

"Less positive in June was a further reduction in employment despite upturns in output and new orders, suggesting that workloads still have some way to go before they return to levels putting pressure on capacity.” 

 "Overall, the sector goes into the second half of the year on a positive footing, and firms should be well placed to remain in growth territory should we see a more stable international environment during the remainder of 2026", he noted.

Vietnam's May PMI reaches its highest since February

VOV.VN - Vietnam's Manufacturing Purchasing Managers’ Index (PMI) rose to 52.8 in May, up from 50.5 in April and reaching its highest since February.