Manufacturing sector shows sign of recovery in May

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) posted below the 50.0 no-change mark for the second consecutive month in May, but rose to 49.8 from 45.6 in April to signal a near-stabilization of business condition in the sector, according to the latest report released by the S&P Global on June 2.

As was the case in April, new orders decreased during May, with survey respondents linking the latest fall to tariffs and subdued market demand. The impact on demand was most keenly felt in export markets, with new business from abroad declining at a much faster pace than total new orders. The fall in new export orders was broadly similar to that seen in April, while the reduction in total new business was softer than in the previous month.

While new orders continued to fall, output returned to growth in May following a decline in April. Greater stability around tariff policies reportedly helped to support the renewed rise in production, while capacity improvements were also mentioned.

In a similar vein to the trend in production, business confidence improved in May amid more stable tariff policies.