Vietnam Manufacturing PMI Rises to 52.3 as Export Orders Fall and Factory Growth Slows

Factories expand for a 16th month as pressures build

Vietnam's manufacturing Purchasing Managers' Index rose to 52.3 in October 2026 from 51.9 in September, extending a run of improving business conditions to 16 months. Behind the higher headline figure, however, factories recorded slower growth in production and new orders, falling export orders and increasing difficulty obtaining materials.

S&P Global's survey of approximately 400 manufacturers, with responses collected from October 12 to 22, showed production growth easing to its weakest pace in six months. Total new business increased for a sixth consecutive month, but at the slowest rate in that period as weaker orders from overseas held back demand.

Manufacturers also faced a more expensive and less reliable supply process. Supplier delivery times lengthened to the greatest extent since April, while input costs rose at their fastest pace since June. Higher oil prices pushed up fuel and transportation expenses, and poor weather contributed to shipping delays.

Andrew Harker, economics director at S&P Global Market Intelligence, described the pressures facing companies trying to sustain their expansion:

Vietnamese firms are battling to maintain growth at present amid headwinds that are making their operations more challenging. New orders continued to rise in October, feeding through to a solid increase in production, but in both cases rates of expansion slowed from September.

What the higher PMI means

The PMI is a survey measure of changes in manufacturing conditions compared with the previous month. A reading above 50 signals improvement, while a reading below 50 signals deterioration. October's increase of 0.4 points therefore kept Vietnam's factories on the expansion side of that dividing line.

The figure of 52.3 is an index reading, rather than a percentage increase in factory output. Production, orders, employment, delivery times and inventories provide different views of how businesses are operating. In October, the headline measure improved even as several of those underlying conditions became more difficult.

For manufacturers, the practical picture was continued growth with tighter limits. Customers were still placing more orders in total, but orders were increasing more slowly and some factories lacked the materials needed to raise production as much as they otherwise could.

Export weakness slows the rise in orders

Total new orders increased for the sixth month running, supported by stronger customer demand. New export orders nevertheless fell, reducing the pace of growth across the manufacturing sector.

Vietnam's factories were therefore facing two different demand signals: more new business in total, alongside fewer new orders from customers overseas. The decline in export business left manufacturers more dependent on demand elsewhere in their order books to keep activity growing.

October's increase in total orders was described as solid, but it was the weakest of the six consecutive monthly increases. Production followed a similar direction, continuing to rise while losing speed compared with September.

Some manufacturers specifically linked their production constraints to difficulties securing raw materials. Demand and supply were both shaping the slowdown: new work was arriving more slowly, and missing inputs were restricting how quickly some companies could turn orders into finished products.

Deliveries become slower and harder to manage

Supplier delivery times lengthened markedly in October, with the deterioration the greatest since April. Respondents identified rising fuel prices and poor weather among the factors delaying transportation.

For a factory, a delivery delay can mean waiting for a material or component before completing an order. October's survey connected those delays with actual limits on production growth, rather than simply higher transportation bills.

Manufacturers continued to increase their purchases of inputs as they sought goods to support production. Even so, their stocks of purchased materials fell solidly. Difficulties importing goods, combined with the use of materials already in storage, reduced the reserves available inside factories.

Companies were consequently buying more while holding less stock. Goods being purchased were not replenishing inventories quickly enough to offset the materials used in production. That left factories with a smaller reserve to draw on when another delivery was late.

Oil and transport push costs higher

Input price inflation accelerated for a second consecutive month in October and reached its fastest pace since June. Higher oil costs fed through to fuel prices, while rising transportation charges added to the expense of obtaining materials and moving goods.

Input costs are the expenses manufacturers pay to make their products, including materials and other production needs. When these costs rise, companies must decide how much they can absorb and how much to pass on through their selling prices.

Vietnamese manufacturers raised their output prices at a faster pace in October, following only a slight increase in September. Customers buying directly from factories therefore faced quicker price increases as producers responded to their own rising expenses.

The acceleration still left input price inflation well below the spike recorded following the outbreak of war in the Middle East. October brought renewed cost pressure, but the survey's historical comparison placed it below that earlier surge.

Harker said international conditions were affecting both costs and the movement of goods:

The limits to growth were often due to the international environment. Fuel and transportation costs rose amid higher oil prices, while companies reported difficulties importing and exporting products. While firms are able to maintain improvements for now, they will be hoping for a more conducive environment to growth in the months ahead.

Employment falls while unfinished work shrinks

Manufacturing employment decreased slightly for a third consecutive month in October. Some companies attributed the reduction to staff resignations, leaving the sector with a smaller workforce even as production continued to expand.

Factories nevertheless reduced their backlogs of work modestly. A backlog is work that has been ordered but has not yet been completed. Slower growth in new orders, together with more efficient processing of outstanding business, allowed companies to reduce that unfinished workload.

The combination shows how uneven the expansion had become. Manufacturers were producing more with fewer workers, while the slower arrival of new business helped them finish existing orders. The modest decline in backlogs offered some relief, even as material shortages constrained production at certain firms.

Stocks shrink before and after production

Finished goods inventories fell markedly as manufacturers sold products held in warehouses. The decline was slightly less pronounced than in September, but companies continued to reduce the stock of completed goods available for sale.

Inventories were therefore shrinking at both ends of the production process. Factories held fewer purchased inputs awaiting use and fewer finished products awaiting customers. The reasons differed: difficulties importing materials and their use in production reduced input stocks, while sales of warehoused products lowered finished goods stocks.

Selling stored products gave manufacturers another way to meet customer demand alongside current production. At the same time, the reduction in material reserves made timely deliveries more consequential for keeping factory operations running.

Confidence rises despite the operating strain

Manufacturers remained optimistic about production over the following 12 months. Business sentiment reached its highest level in eight months, supported by hopes that raw materials would become easier to obtain and market conditions would improve further.

Confidence nevertheless remained below its level before the war in the Middle East. Companies were more positive than in recent months while continuing to face the fuel costs and trade difficulties described in October's survey.

The survey gives no precise timetable for easier material supply or a recovery in export orders. Those improvements were expectations behind manufacturers' optimism, while October's responses recorded continuing delays and falling overseas orders.

For factory managers, the immediate priorities were concrete: securing enough materials, managing higher transportation expenses and completing customer orders. A stronger flow of new business would be easier to turn into production if supplies arrived more reliably.

How October fits into the recent trend

October's results, published on November 2, 2026, brought together several trends moving at different speeds. The main dates and comparisons show why the higher PMI came alongside a more cautious account of factory operations.

• September 2026: The manufacturing PMI stood at 51.9, and factory selling prices rose only slightly.
• October 12 to 22, 2026: Responses were collected from approximately 400 manufacturers for the October survey.
• October 2026: The PMI rose to 52.3, marking the 16th consecutive month of improving business conditions.
• October 2026: New orders increased for a sixth month, while employment declined for a third month.
• November 2, 2026: Publication of the October results showed slower growth in production and orders alongside faster cost increases.

The clearest change since September was a more demanding operating environment within a continuing expansion. Output and new orders still rose, but less quickly. Costs increased faster, deliveries suffered greater delays and manufacturers drew down stocks while trying to maintain production.

Key Points

• Vietnam's manufacturing PMI increased to 52.3 in October from 51.9 in September, extending improvement to 16 months.
• Total new orders rose for a sixth month, but falling export orders slowed their growth.
• Production growth eased to a six month low as some factories struggled to obtain raw materials.
• Supplier delivery delays were the most pronounced since April, and input cost inflation was the fastest since June.
• Employment fell slightly for a third month, while unfinished work and inventories declined.
• Confidence about production over the next 12 months reached an eight month high, supported by hopes for better supplies and market conditions.