Vietnam's manufacturing PMI in April fell to 45.6 points

Vietnam's manufacturing PMI in April fell to 45.6 points, falling out of the growth threshold after a month of recovery.

New orders recorded a decline

On the morning of May 5, 2025, S&P Global released the Vietnam Manufacturing Purchasing Managers' Index (PMI) report for April 2025. There were three highlights: Output, new orders and employment all decreased significantly; Business sentiment reached its lowest level since August 2021; Input cost growth slowed down and output prices decreased.

After three consecutive months of hovering around the 50-point mark, the Vietnam manufacturing PMI index "fell" sharply from 50.5 points in March to only 45.6 points in April 2025.

This is the lowest level since May 2023 and reflects the sharpest decline in the manufacturing sector in 11 months. The survey was conducted with 400 businesses from April 9 to 22.

Notably, new orders in manufacturing fell significantly in April, reversing the upward trend seen in March. Moreover, the rate of decline was the sharpest and quickest in nearly two years. Respondents said that the decline in new orders reflected the impact of volatile international market conditions.

On a positive note, input costs have cooled. According to S&P Global, the pace of raw material price increases in April 2025 was the weakest since the price increase streak began in August 2023. Some survey participants said that international oil and transportation costs have begun to decline, easing import pressure and improving the potential for a recovery in gross profit margins in the second and third quarters.

Deep price drop, open expectations for policy

Weakening global consumer markets have forced manufacturers to continue cutting prices to retain customers. April marked the fourth consecutive month of price declines, the steepest in 21 months. While this may have a negative impact on short-term profits, the price declines could help stabilize inflation expectations, a key factor in allowing for more flexible monetary policy in the second half of the year.

PMI in April 2025 fell below the growth threshold after a month of recovery. But to overcome and enter a real growth cycle, the economy needs more traction from the international market and reasonable domestic policies. Photo: TT

In that context, with weakened business sentiment and contained inflation, tools such as increasing preferential credit or restructuring capital flows are expected to be deployed with greater intensity. This is also one of the timely support strategies for groups of businesses heavily affected by trade fluctuations.

However, for financial investors, the PMI is not simply a technical signal but a guiding indicator for the profit cycle. Stock re-valuation and the expectation of a return to cash flow will only be truly justified when orders stabilize, output recovers and input costs are controlled. At that time, industry groups sensitive to economic cycles such as logistics, supporting industries, raw materials and industrial real estate will be the focus of the new allocation strategy.

In an uncertain environment, it is important to keep an eye on S&P Global’s Vietnam Manufacturing PMI data in the coming months to see how business conditions are evolving. This is a warning not only for manufacturing companies but also a reminder for all investors looking for early signals from the real economy, according to Andrew Harker, Chief Economist at S&P Global Market Intelligence.

PMI in April 2025 fell below the growth threshold after a month of recovery. But to overcome and enter a real growth cycle, the economy needs more traction from the international market, reasonable domestic policies and especially more confidence from the business community itself.

Duy Anh

Source: https://congthuong.vn/pmi-nganh-san-xuat-cua-viet-nam-thang-4-giam-con-456-diem-386048.html