The report outlines that Vietnam’s PMI dropped back below the 50.0 no change mark in April, after having signalled growth for the first time in four months during March. At 45.6, the latest reading was down from 50.5 and signalled a marked monthly deterioration in terms of the health of the sector.

In fact, output, new orders, employment, and purchasing were all down sharply, while business confidence dipped to a 44-month low amid concerns regarding the further impact of tariffs on future production.

Moreover, the rate of contraction was sharp and at its fastest rate in almost two years. Respondents indicate that the drop in new orders reflects the introduction of tariffs imposed by the US as well as the fluctuations occurring in international market conditions.

The report indicates that new export orders fell even more quickly than the total number of new businesses amid the declaration of tariffs.

The sixth successive decrease in new business from abroad was the most marked since June, 2023. Tariffs, along with the reduction in new orders, led to a renewed fall in production following a rise in March. The decline in output was marked and the fastest since January, 2023.

Meanwhile, business confidence dropped sharply and was the lowest since August 2021. In fact, the level of optimism was one of the weakest in the series history.

The backlog of work was quickly reduced amid lower new orders, with the rate of depletion broadly in line with that seen in the previous month.

"The imposition of tariffs by the US knocked the Vietnamese manufacturing sector into contraction during April, with firms seeing marked reductions in new orders, exports and production,” said  Andrew Harker, economics director at S&P Global Market Intelligence.

“What's more, the potential for further disruption to the sector as a result of additional tariffs meant that business confidence slumped and was one of the lowest on record. In what is a fluid situation, it will be important to keep tracking the S&P Global PMI data for Vietnam over the coming months to see how business conditions evolve," he added.

Vietnamese PMI bounces back in March: S&P Global

VOV.VN - The Vietnam Manufacturing Purchasing Managers' Index (PMI) posted above the 50.0 no-change mark for the first time in four months, signaling that the Vietnamese manufacturing sector returned to growth in March, according to the latest report released by S&P Global.