Vietnam’s manufacturing sector faced renewed headwinds in June, with the S&P Global Manufacturing PMI slipping to 48.9 from 49.8 in May→view source.
This marked the third consecutive month below the 50.0 no-change threshold, indicating a modest deterioration in business conditions as the first half of 2025 closed.
Key details
- New orders fell for a third month, declining at a faster pace than in May, driven in large part by a sharp drop in new export business. The fall in export orders was the most severe in over two years, with firms citing the impact of US tariffs.
- In response, manufacturers scaled back employment, purchasing activity, and inventory levels. Staffing levels decreased for a ninth straight month and at a much quicker rate than previously.
- Despite weaker demand, production volumes still managed to rise slightly for a second month, though the pace of growth slowed.
- Input costs edged higher after falling in May, linked to material shortages and dong depreciation. This led to a slight increase in selling prices — the first price hike so far in 2025.
- Business confidence improved from April’s low point but remained below historical averages, with firms hoping for a more stable trade environment going forward.
According to S&P Global’s Andrew Harker, the intensified impact of tariffs weighed heavily on orders and exports, and while production has held up, this resilience may be difficult to sustain without stronger demand recovery.
See also: Manufacturing in Vietnam 2025: Growth, Options & Other Key Considerations