HCMC – Vietnam’s manufacturing sector expanded at a faster pace in October, with the S&P Global Manufacturing Purchasing Managers’ Index (PMI) rising to 54.5 from 50.4 in September, the strongest improvement since July 2024.
S&P Global said output and new orders increased sharply as domestic demand improved. New export orders rose for the first time in a year, though only slightly.
Manufacturers increased production for the sixth straight month, posting the fastest growth since July 2024. Business confidence reached a 16-month high on expectations that new orders will continue to rise.
Rising workloads led firms to add staff for the first time in more than a year. Backlogs of work increased at the quickest pace in over three years, with some companies citing storm-related disruptions.
Purchasing activity increased for the fourth month in a row, resulting in the first rise in input inventories in more than two years. Stocks of finished goods fell slightly as firms used existing inventory to meet orders.
Supplier delivery times lengthened at the fastest rate since July, partly due to adverse weather and flooding.
Input cost inflation accelerated to its highest level since July 2024, with 27% of surveyed firms reporting higher raw material prices and supply shortages. Output prices also increased, hitting a 40-month high.
Andrew Harker, economics director at S&P Global Market Intelligence, said the sector posted stronger increases in output and new orders in October, which supported hiring and inventory building. He added that the sustainability of the current growth pace remains uncertain as inflation pressures continue to rise.
“Whether these growth rates can be sustained in the months ahead remains to be seen, but there is clearly some positive momentum in the sector at present,” said Harker.
