At least part of the increase was due to safety stock building by customers due to the war in the Middle East causing steep price rises and supply-chain delays.
Similarly, stockpiling efforts also encouraged manufacturers to raise their own purchasing activity.
Vietnam’s manufacturing sector expanded midway through Q2 2026 as new orders returned to growth in May, S& P Global said.
At least part of the rise was due to safety stock building by customers due to the Iran war causing steep price rise and supply-chain delays.
The rate of job shedding in the sector was marginal.
Confidence in the year-ahead outlook for production improved to a three-month high in May.
Despite the improvements in new orders and output, firms continued to scale back their workforce numbers amid evidence of continued spare capacity.
The S&P Global Vietnam manufacturing purchasing managers’ index (PMI) rose to 52.8 in May from 50.5 in April, reaching its highest since February, just before the outbreak of war in the Middle East.
The solid overall improvement in business conditions was the eleventh in as many months.
A renewed increase in new export orders was also recorded, ending a two-month sequence of decline. The pace of expansion, however, was only marginal, as high transportation costs and logistics issues limited international demand.
There was a marked expansion of manufacturing production in May. Output rose for the thirteenth successive month, and at the fastest pace since February.
The rate of input cost inflation continued to accelerate midway through Q2 2026, quickening for the fourth consecutive month to the fastest since April 2011. Fuel, oil and transportation were the main drivers of higher input costs, a release from S&P Global said citing respondents.
Selling price inflation also remained elevated and was among the sharpest in the past 15 years, despite easing slightly from that seen in April.
Higher costs for fuel and shipping, plus issues with logistics, caused a further lengthening of suppliers’ delivery times in May.
Stocks of finished goods were also down in May this year, albeit to a smaller degree than in April.
The rate of job shedding in Vietnam’s manufacturing sector was marginal.
Confidence in the year-ahead outlook for production improved to a three-month high in May amid hopes for an increase in new orders and business expansion plans.
Sentiment remained relatively muted, however, reflecting concerns about the ongoing impact of the war in the Middle East.
Fibre2Fashion News Desk (DS)
