January PMI drops below the 50.0 no-change mark

Business conditions in the Vietnamese manufacturing sector deteriorated in the opening month of 2025 amid renewed falls in both output and new orders, according to the latest report from the S&P Global Vietnam.

Firms responded to lower workloads by scaling back employment and reducing stocks of both purchases and finished goods. Meanwhile, the rate of input cost inflation softened, providing some opportunity for firms to lower selling prices as part of efforts to stimulate demand.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) posted 48.9 in January, down from 49.8 in December and below the 50.0 no-change mark for the second successive month. The deterioration in operating conditions was modest, but slightly more pronounced than was the case in the previous survey period.

However, firms maintained an optimistic outlook for production over the coming year, with sentiment recovering from the 19-month low posted in December. More than 36% of respondents predicted a rise in output over the next 12 months, linked to hopes of a recovery in market demand.