AsemconnectVietnam - Vietnam's manufacturing PMI fell to 51.2 points in March due to the impact of the conflict in the Middle East.

S&P Global has just released the Purchasing Managers' Index (PMI) for Vietnam's manufacturing sector in March of 2026. Three key highlights were: sharply rising input costs led to the fastest increase in output prices since April of 2011; the growth rate of production and new orders slowed significantly; and delivery times were extended to the greatest extent in four years.
A report by S&P Global indicatedthat the conflict in the Middle East is creating strong ripple effects on Vietnam's manufacturing sector, causing input costs to escalate and pushing selling prices up at the fastest rate since April 2011.
The rising inflationary pressure has directly constrained market demand, leading to a significant decline in output growth and new orders. In addition, supply chain disruptions have worsened, with delivery times extended to their longest level in four years.
According to the report, Vietnam's manufacturing PMI remained above 50 points in March, marking the ninth consecutive month of improved business conditions, but the growth momentum has slowed noticeably. Specifically, the PMI index fell from 54.3 points in February to 51.2 points in March, showing the least improvement recorded since September last year.
The most striking feature of this survey was the negative impact of the Middle East war on inflation. The escalation of world oil prices led to soaring freight, fuel, and transportation costs. As a result, nearly half of the businesses surveyed reported a sharp increase in their input costs in March, at the fastest rate since April of 2022.
To cope with this burden, manufacturers were forced to pass costs on to customers, causing output prices to rise at the fastest rate in nearly 15 years and one of the highest increases since the survey series began in 2011.
This price increase has begun to erode consumer demand. Although the total number of new orders continued its upward trend thanks to some customers buying ahead of further price increases, the overall growth rate slowed to its weakest level since September last year. In particular, demand from international markets showed significant signs of decline, with the number of new export orders reversing its downward trend after remaining stable the previous month.
The number of new orders remains in growth territory.
Corresponding to the order trend, production output in March also recorded its most modest growth in the past 11 months. While this was the 11th consecutive month of production increase, the improvement was considered the least significant since June 2025. The less optimistic business outlook also caused business confidence to fall to its lowest level in the past six months due to concerns about price volatility and the supply of raw materials in the international market.
Geopolitical tensions have also had serious repercussions for supply chains. Manufacturing businesses are facing the most severe supplier delivery delays in four years, primarily due to rising fuel costs hindering transportation. Under pressure from costs and slowing new orders, manufacturers have become more cautious, deciding to cut back on input purchases, ending an eight-month period of growth.
The manufacturing labor market also saw its first six-month decline in staffing. Businesses reported difficulties replacing laid-off workers and reducing the number of temporary contract workers. As a result of this labor shortage, the backlog of work increased for the first time in four months. To meet existing orders, many manufacturers have had to tap into finished goods inventory, leading to a significant decrease in post-production stock.
Commenting on the survey results, Andrew Harker, Director of Economics at S&P Global Market Intelligence, said that the Vietnam Manufacturing PMI highlights the initial impacts of the war in the Middle East on manufacturing companies.
CK
Source: VITIC/congthuong.vn