Vietnam’s Manufacturing Purchasing Managers’ Index stood at 51.2 in March, down from 54.3 in February but remaining above the 50.0 no-change threshold, extending the current sequence of improving business conditions to nine months, according to S&P Global.
The report highlighted the impact of the war in the Middle East, which led to a marked acceleration in input cost inflation across the manufacturing sector. Higher oil prices pushed up freight, fuel and transportation costs, with close to half of surveyed firms reporting rising input costs during the month. The pace of inflation was the sharpest since April 2022.
Rising costs were passed on to customers, with output prices increasing at one of the fastest rates since the survey began in 2011. The March rise marked the steepest increase in just under 15 years.
Despite continued expansion, demand showed signs of strain. Total new orders rose modestly, with some firms reporting that clients brought forward purchases to avoid future price increases. However, growth was the weakest since last September, while new export orders declined markedly after stable conditions in February.
Manufacturing output also increased at a slower pace, marking an eleventh consecutive month of growth but the least pronounced since June 2025.
Slower new order growth and higher costs made firms more cautious, leading to a marked decline in input buying and a reduction in stocks of purchases, ending an eight-month expansion period. Suppliers’ delivery times lengthened significantly, the most pronounced deterioration in four years, with higher fuel costs contributing to transportation delays.
Business confidence fell to a six-month low amid concerns over the war’s impact on demand, prices and supply chains. Still, firms on balance expect output to rise over the coming year, supported by underlying demand.
Andrew Harker, economics director at S&P Global Market Intelligence, said the March data reflected the immediate effects of the conflict on Vietnam’s manufacturing sector, particularly through rising oil-related costs and supply chain disruptions.
He noted that while output and new orders remained in expansion territory, growth had slowed sharply, with some activity driven by advance purchasing ahead of price increases. The near-term outlook remains uncertain unless disruptions linked to the conflict, including through the Strait of Hormuz, are resolved quickly.
