Viet Nam’s manufacturing sector sustains expansion in September

The S&P Global Viet Nam Manufacturing Purchasing Managers' Index (PMI) stood at 51.9 points in September, down from 53.3 in August, but remained above the 50-point threshold that separates expansion from contraction. The latest reading marked the 15th consecutive month of improved business conditions in the manufacturing sector, according to a report released by S&P Global on October 1.

Production continued to expand robustly in September, extending the current growth streak that began in May 2025. However, the rates of growth in output and total new orders both eased from the previous month.

Survey respondents attributed the increase in new business mainly to favorable domestic market conditions and higher order volumes from existing customers.

In contrast, weaker international demand weighed on the export-oriented segment. New export orders declined for the second consecutive month, with the rate of contraction accelerating to its fastest since April.

External pressures also affected manufacturers' input costs and supply chains. Rising geopolitical tensions in the Middle East pushed up oil, fuel and international freight costs, resulting in a slightly faster increase in input prices than in August.

International shipping bottlenecks, together with adverse weather conditions, also led to minor delays in supplier deliveries.

Despite rising input costs, the pace of increase in manufacturers' output prices eased for the fifth consecutive month, reaching its weakest level since June 2025. S&P Global attributed the moderation partly to intense market competition, which limited manufacturers' ability to pass higher costs on to customers.

Manufacturers also continued to reduce outstanding workloads as new order growth slowed. Employment declined slightly for the second consecutive month, with survey respondents citing staff resignations and corporate restructuring.

Purchasing activity increased significantly to meet production requirements, resulting in a further reduction in stocks of inputs. Manufacturers also used faster shipping services to clear finished-goods inventories, contributing to the fastest decline in stocks of finished goods since the survey began in March 2011.

Business confidence, meanwhile, strengthened markedly in September, reaching a seven-month high. Manufacturers expressed strong optimism about output over the next 12 months, supported by planned product launches and expectations of further stabilization in market conditions.

"While Viet Nam's manufacturing sector maintained growth in September, data indicated that the international environment had constrained this growth rate," said Andrew Harker, Economics Director at S&P Global Market Intelligence.

He noted that declining new export orders, higher fuel and oil costs amid the conflict in the Middle East, and international shipping delays had created additional challenges for manufacturers.

Nevertheless, Harker said significant production growth continued, indicating that manufacturing would remain an important contributor to Viet Nam's economic performance in the third quarter of 2026. /.