This marks a return to expansion territory (above 50 points) after three consecutive months of contraction - 48.9 in June, 49.8 in May, and 45.6 in April. S&P Global noted that the sharp improvement in business conditions was the most notable in nearly a year, supported by a rebound in new orders.

According to the survey, new orders rose for the first time in four months, with the fastest growth since last November. However, some respondents highlighted the negative impact of US tariffs, which continued to weigh on export orders.

The renewed increase in new orders supported production growth in July and the rate of expansion was significant, marking the fastest growth in 11 months.

Meanwhile, employment neared stabilisation. The report shared that although staffing levels continued to fall amid ongoing spare capacity following the recent period of declining new orders, the latest reduction was the slowest in nine months as output requirements increased.

Moreover, backlogs of work continued to fall, it noted, albeit to the smallest extent in the current seven-month sequence of depletion.

Despite a resumption of growth in the purchasing of inputs, stocks of purchases fell again as panellists reported difficulties in securing raw materials.

S&P Global added that finished goods stocks also decreased in July. Material shortages resulted in further lengthening of suppliers' delivery times. The latest deterioration in vendor performance was significant and only slightly less severe than in June.

The report said that difficulties in sourcing materials, particularly those from abroad, led to an increase in input costs at the start of the second half of the year. Input prices increased for the second successive month, and at a solid pace that was the fastest in 2025 so far.

“The pace of output price inflation also quickened in July as firms passed on higher input costs to customers. Here to, the rise was the sharpest in seven months. That said, the increase in charges was only modest,” it stressed.

Although manufacturers remained optimistic that output would increase over the coming year, the report revealed, sentiment dipped to a three-month low in July, falling well below the series average.

“Panellists linked confidence to hopes for more stable economic conditions, new product launches and new orders. However, concerns about the impact of US tariffs also affected the outlook”, it concluded.

Vietnam's PMI rebounds in May amid improved output and business confidence

VOV.VN - Vietnam’s Manufacturing Purchasing Managers' Index (PMI) remained below the 50.0 no-change threshold for a second consecutive month in May but climbed to 49.8 from 45.6 in April, signaling a near-stabilisation in business conditions, according to S&P Global.