Viet Nam manufacturing marks strongest expansion in five months

Business conditions have now strengthened in 13 consecutive months, with the latest improvement the most pronounced since February. Manufacturing production increased sharply in July, with the rate of expansion quickening to a five-month high. Output has now risen continuously on a monthly basis since May 2025.

Firms often linked higher output to an increase in new orders. New business expanded for the third month running in July, and at a faster pace than in June.

Total new sales were supported by a solid increase in new export orders, which rose at the sharpest rate since July 2024. Anecdotal evidence indicated that the improving growth picture in the sector was in part reflective of an easing of inflationary pressures.

Andrew Harker, Economics Director at S&P Global Market Intelligence said: "The second half of 2026 got off to a strong start as July PMI data pointed to improving growth momentum across the Vietnamese manufacturing sector.

"Softening inflationary pressures and an improving demand environment meant that firms were increasingly able to secure new work, including from abroad where growth had remained muted up until July. Manufacturers were confident enough in the future to begin hiring staff again, as well as ramping up production and purchasing. Business sentiment remained below the level seen prior to the outbreak of war in the Middle East, however, and the fortunes of the sector for the remainder of the year will likely remain closely tied to geopolitical events.

Hopes that new orders will continue to rise and plans for expanded production capacity were among the factors supporting confidence in the 12-month outlook for output in July./.