Business confidence in Vietnam increases

According to the Vietnam Manufacturing Purchasing Managers' Index (PMI) report for February 2025, business confidence increased for the second consecutive month...

On the morning of March 3, 2025, S&P Global released its Vietnam Manufacturing Purchasing Managers' Index (PMI) report for February 2025.

Industrial production activities - Illustration

According to a report by S&P Global, Vietnam's manufacturing PMI in February 2025 remained below 50 points for the third consecutive month, although it rose slightly to 49.2 points from 48.9 points in January 2025. This result reflects a slight decline in business conditions during the month.

Survey respondents reported weak demand in both domestic and international markets. Weak customer demand led to a continued decline in new orders and output. As a result, companies continued to cut jobs. On the price side, the rate of increase in input costs slowed to a 19-month low, and output prices fell for the second consecutive month.

However, contrary to the general trend in the manufacturing sector in February, purchasing activity increased slightly. In some cases, the increase in input purchases reflected confidence in the upcoming trajectory of manufacturing output.

In fact, business confidence rose for the second consecutive month to its highest level since June last year. Companies are hoping that stable economic conditions will support an improvement in new orders and thus boost production growth.

"Another factor contributing to the increase in purchasing activity in February was the desire to secure raw material supplies amid uncertainty about availability and supply chain delays," the report noted.

According to the S&P Global report, supplier delivery times continue to lengthen, further extending the downward trend in vendor performance that began in September 2024. Moreover, the lengthening of delivery times during this period was the most significant in five months.

Along with reporting transportation shortages, companies also indicated increased shipping costs. Rising raw material prices led to a rebound in input costs in February. However, the rate of cost increase was the weakest in the current 19-month streak and lower than the index's historical average.

In contrast to rising input costs, manufacturers lowered selling prices for the second consecutive month amid weak demand. The reductions were slight but faster than in January.

Andrew Harker, Director of Economics at S&P Global Market Intelligence, said that manufacturers in Vietnam continued to report weak demand in February, and the manufacturing sector has struggled to regain momentum in 2025 so far.

On a more positive note, companies are increasingly optimistic about future output trends, although business confidence is often based on the hope that economic conditions will stabilize in the coming months.

Transportation issues were a major obstacle for the manufacturing sector in February, with survey respondents citing problems with shipping speeds and availability, as well as higher costs. Companies will be hoping these supply-side constraints will ease, and demand will improve in the near future.

Source: https://congthuong.vn/pmi-thang-22025-niem-tin-kinh-doanh-tai-viet-nam-tang-376488.html