New orders increase sharply, output bounces
The PMI of Vietnam's manufacturing industry reached 52.4 points in July 2025, up sharply from 48.9 points in June and exceeding 50 points for the first time in 4 months. This is also the most obvious improvement in business conditions in nearly a year, according to a report by S&P Global released on the morning of August 1.
According to the report, the number of new orders increased for the first time in 4 months, at the fastest pace since November 2024. This development has led to an increase in output for the third consecutive month, reaching the highest rate in 11 months.
Purchase activities have also been boosted, reaching the fastest increase since August 2024. Employment is almost stable, although the number of employees continues to decrease slightly, the rate of decrease has been the slowest in 9 months.
Although domestic orders have increased, new export orders continue to decrease - the downward trend has lasted for 9 months. Many businesses participating in the survey said that US tariffs are the main reason for the decline in international orders.
Mr. Andrew Harker, Chief Economist at S&P Global Market Intelligence, commented: July PMI data showed that the Vietnamese manufacturing industry is recovering after operational disruptions due to US tariffs. Although the number of new export orders has decreased, companies have compensated with orders from other markets. However, if the shortage of raw materials and delivery delays continue to persist, the growth rate of the industry may be limited".
Sharp increase in costs, businesses forced to increase selling prices
The report also recorded input costs increasing for the second consecutive month, at the fastest pace since the beginning of the year. The main reason comes from the scarcity of raw materials, especially imports, causing long delivery times and continued decreased input inventories.
To offset costs, businesses have increased output prices. This is the strongest increase in 7 months, although still at a moderate level.
Although still optimistic about the prospects for the next 12 months, business sentiment in July fell to a 3-month low. Many manufacturers expect a more stable economy, recovery needs and new product launches, but are still concerned about the prolonged impact of US tariffs.
* PMI (Purchasing Managers' Index) is an index reflecting the health of the manufacturing industry through a survey of purchasing managers. An index above 50 points shows improvement, below 50 points shows a decrease compared to the previous month.
