After four months of weakness, Vietnam's manufacturing sector showed signs of expansion for the first time in March, according to data analytics firm S&P Global.
A report recently released by S&P Global (USA) shows that Vietnam's purchasing managers' index (PMI) in March reached 50.5 points, up from 49.2 points in February. A PMI above 50 reflects expanding production and vice versa.
This was the first time in four months that the PMI has been above 50, a signal of improving business conditions. Output rose for the first time in three months, with the largest increase since August 2024. Total new orders also improved, albeit modestly.
"Vietnam's manufacturing sector began to perform more strongly in March, with output and new orders rising for the first time since early 2025," said Andrew Harker, chief economist at S&P Global Market Intelligence.
Some manufacturing and exporting enterprises have also recorded signs of stability recently. At the shareholders’ meeting late last month, Song Hong Garment’s board of directors said orders had been secured until July-August and the US remained its key market.
During the 90-day tax deferral period, Song Hong Garment received requests from customers to speed up delivery to take advantage of this time. Despite the unpredictable tax situation, the company still targets revenue and pre-tax profit this year to increase by over 4% and 10%, respectively.
"Pangasius queen" Vinh Hoan plans for 2025 revenue to be affected by unstable trade but profits still have room to grow. To date, the company has not recorded any major risks related to order volume, especially in the US market.
Or Duc Giang Chemicals reported a 17.8% increase in first-quarter revenue compared to the same period in 2025, driven by growth in the yellow phosphorus (P4) segment. Increased chip demand continued to support growth momentum for the P4 segment. First-quarter export revenue also increased by 20%, exceeding the 13.2% increase in the domestic market.
However, Vietnam's manufacturing industry still faces challenges. S&P Global’s survey of business sentiment showed that sentiment was upbeat but still below average. While output and new orders rebounded, businesses were slightly less confident about the outlook for output next year.
In fact, new export orders alone have fallen for five consecutive months. According to Andrew Harker, manufacturers are cautious, reluctant to expand hiring or buy more raw materials. “This may reflect an uncertain international environment,” he said.
The business situation of Hoa Sen Group is an example. The first quarter's consumption output decreased by 6% compared to the same period last year, reaching 420,700 tons. Of which, the domestic consumption of galvanized steel increased by 41% but exports decreased by 38%, to 160,000 tons.
Although orders are coming into the third quarter, Song Hong Garment also assessed that the fourth quarter outlook is still uncertain, as even major brands do not have clear plans. The company's management expressed a cautious view on the impact of the reciprocal tax, saying that the basic rate of 10% has already put significant pressure on profit margins.
And if this level is exceeded, it can threaten the existence of some businesses in the textile supply chain. This company therefore focuses on producing high value-added products and moving higher up the value chain.
Meanwhile, S&P Global noted that some Vietnamese manufacturers have made efforts to maintain competitiveness by slightly reducing selling prices for the third consecutive month.
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