The report outlined that international demand weakened, with firms remaining cautious around hiring and purchasing as business confidence softened.

Meanwhile, the rate of input cost inflation eased and manufacturers moved to lower their selling prices for the third month running.

At 50.5, the PMI was up from 49.2 in February and pointed to a slight strengthening in the overall health of the sector. Manufacturing production increased for the first time in three months during March, rising to the largest degree since August last year.

According to respondents, the rise in output in part reflects improvements made in terms of the availability of goods, but also a renewed increase in new orders, which likewise expanded following a two-month sequence of decline.

The report pointed out that growth of new orders was recorded amid signs of improving customer demand, but that the growth was only slight amid an ongoing weakness in international demand.

In fact, new export orders decreased markedly and at the fastest pace since July 2023. New business from abroad has now fallen over five successive months. Some panelists reported a drop in orders from China.

While output and total new orders returned to growth, firms were slightly less confident in the year-ahead outlook for production than was the case back in February. Sentiment remained positive amid higher new orders and hopes for stable demand, but optimism was below the series average.

Manufacturers therefore exhibited caution with regard to employment and purchasing in March. Staffing levels decreased for the sixth consecutive month, linked to a recent period of subdued demand and staff resignations. That said, the drop in workforce numbers was the weakest this year so far.

Meanwhile, purchasing activities decreased for the first time in four months, with firms suggesting that the recent period of input buying meant that the holdings of goods were sufficient to support output requirements. In turn, stocks of purchases decreased, albeit to the least marked extent since August last year.

Overall, input costs increased only slightly and at the slowest pace in the current 20-month sequence of inflation. Meanwhile, efforts to maintain competitiveness led local manufacturers to lower their selling prices for the third consecutive month. The fall was only slight, however.

Andrew Harker, Economics Director at S&P Global Market Intelligence, said, "The Vietnamese manufacturing sector kicked into gear in March, seeing the first increases in output and new orders in 2025 so far. Firms will hopefully be able to build on these improvements in the months ahead.”

"For now though, there is still a fair amount of caution among manufacturers, leading to a reluctance to hire additional staff or purchase extra inputs. This potentially reflects an uncertain international environment, with new export orders falling sharply during March," he noted.  

Vietnamese PMI exceeds 50 points on solid rebound in new orders: S&P Global

VOV.VN - Vietnam’s Manufacturing Purchasing Managers’ Index (PMI) rose back above the 50.0 no change mark in April, posting 50.3 from 49.9 in March, according to international independent credit rating data source and index provider Standard & Poor’s Global (S&P Global).