The sector saw notable increases in production and new orders, while employment rose for the first time in more than a year. Purchasing activity increased, indicating renewed inventory growth, and business confidence rose to its highest level in 16 months. At the same time, inflationary pressures intensified and prices for both inputs and outputs rose more than in September, S&P said in a news release.
Vietnam’s manufacturing sector gained strong momentum in October 2025 when the S&P global PMI rose to 54.5 from 50.4, the sharpest improvement since July 2024. Output, new orders and employment rose, while confidence hit a 16-month high. Input and output prices rose at a faster pace amid supply issues, although overall optimism remained strong despite inflation and weather pressures.
New orders rose for the second month in a row, driven by improving domestic demand and a slight pick-up in new export business, the first in a year. This led manufacturers to boost production at the fastest pace since July 2024, marking six consecutive months of production growth.
Business confidence strengthened to its highest level in 16 months as companies anticipated continued growth in new orders and planned expansions in production capacity. In response to increased workloads, manufacturers expanded their workforces for the first time in more than a year. Backlogs increased at the fastest pace in more than three and a half years, in part due to adverse weather and flooding that disrupted operations.
Flood-related disruptions also led to longer delivery times for suppliers, the most pronounced since July. Despite supply challenges, companies increased purchasing activity for the fourth consecutive month, leading to the first increase in pre-production inventories in more than two years. However, stocks of finished goods decreased slightly as companies fulfilled large volumes of orders.
Input cost inflation accelerated markedly in October, with about 27 percent of companies surveyed citing higher raw material prices and supply shortages. Producer prices also rose more sharply, hitting a 40-month high, as producers passed on rising costs to customers.
Overall, the October survey results suggest that Vietnam’s manufacturing sector entered the fourth quarter (Q4) of 2025 with strong growth momentum and growing optimism, although rising cost pressures and climate-related disruptions remain key risks to watch.
“The Vietnamese manufacturing sector accelerated in October, seeing much stronger increases in production and new orders during the month. Positively, the strength of the expansions was enough to allow companies to hire additional staff and build up inventories of inputs,” he said Andrew Harker, chief economic officer at S&P Global Market Intelligence. “It remains to be seen whether these growth rates can be sustained in the coming months, but there is clearly positive momentum in the sector at present.”
“However, inflation pressures have risen again and are now relatively high. For now, customers are happy to discuss price increases and commit to new orders, but this may begin to ease if inflation rates rise further,” Harker added.
Fiber2Fashion News Desk (SG)
