Viet Nam’s business confidence climbs to 41-month high: S&P

The PMI signaled a solid monthly improvement in the health of the manufacturing sector, extending the current sequence of strengthening business conditions to eight months and reaching a four-month high.

Manufacturing production increased rapidly in February, with the rate of expansion quickening to a 19-month high. Output rose at the fastest pace in more than a year and a half amid a sharper increase in new orders. Stronger growth in both employment and purchasing activity was also recorded, while business confidence hit a 41-month high.

The ramp-up in production helped lead to the smallest reduction in stocks of finished goods in just over two years. That said, post-production inventories still decreased slightly as products were shipped to customers.

An improved demand scenario also contributed to a marked increase in new orders. New business rose for the sixth successive month, and at the fastest pace since last October.

The expansion in total new orders was recorded despite new export business remaining unchanged from the previous month, with some respondents noting instability in international markets.

Nonetheless, the rise in total new orders and the associated increase in production requirements led to sharper expansions in both employment and purchasing activity midway through the opening quarter of 2026.

Staffing levels rose for the fifth consecutive month, and at a solid pace that was the fastest since September 2022. That said, a number of respondents noted that additional workers had only been hired on a temporary basis. Extra capacity helped firms reduce backlogs of work significantly during the month.

Meanwhile, the latest increase in input buying was the second sharpest in a year and a half (behind December 2025 data). In turn, stocks of purchases increased following a fall in January, although the accumulation was only marginal.

Suppliers' delivery times lengthened modestly again in February, with some respondents indicating that they faced customs delays when importing goods. Stronger demand for inputs meant that suppliers were able to raise their prices during the month.

Manufacturers' input costs increased at a sharp pace, the fastest since June 2022. In addition to higher supplier charges, some firms also noted rising shipping costs.

With operating expenses increasing sharply, manufacturers raised their selling prices accordingly. The rate of inflation was unchanged from the 45-month high seen at the start of 2026.

Improving market demand and the prospect of continued new order growth meant that Vietnamese manufacturers were increasingly optimistic that output will rise over the coming year. Moreover, February saw business confidence strengthen for the fifth consecutive month to its highest level since September 2022.

Amid a volatile global economy, Viet Nam continues to stand out as an attractive destination for foreign direct investment (FDI). Assessments by the Asian Development Bank (ADB), SingCham, UOB, and Coca-Cola Viet Nam indicate that FDI will continue to play a crucial role in driving Viet Nam's economic growth over the next five years, which is expected to be "significant" and "more sophisticated."

Bruno Jaspaert, Chairman of EuroCham assessed that Viet Nam is steadily repositioning itself within the global supply chain. Beyond being a cost-competitive manufacturing base, the country is increasingly viewed as a strategic value-chain partner, supported by its favorable geopolitical location, a young and dynamic workforce, and an expanding network of new-generation free trade agreements. The evolution provides a strong foundation for Viet Nam to attract not only more foreign investment, but higher-quality, value-added capital flows in the years ahead./.