Vietnamese manufacturers recorded a drop in new orders in April as inflationary pressures hit 15-year highs amid increased costs for fuel and oil in particular,  according to a report released by S&P Global on May 4.

With new orders down, firms scaled back their employment levels, purchasing activity and inventories. Output continued to rise, but the rate of growth eased to a ten-month low. Meanwhile, business sentiment waned and was the lowest since September last year.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index™ (PMI®) dropped to a seven-month low of 50.5 in April, down from 51.2 in March. The reading signalled a tenth consecutive monthly improvement in overall business conditions in the sector, but one that was only marginal.

Helping to keep the headline index in positive territory in April was sustained output growth. Production increased for the twelfth month running, reflecting work on existing projects and resilient underlying demand. The rate of expansion was the slowest since June 2025, however, amid rising inflationary pressures, supply shortages and market instability due to the war in the Middle East.

While output continued to rise, other elements of the survey painted a more downbeat picture of conditions in the manufacturing sector during April.

New orders decreased for the first time in eight months as price increases affected the ability of firms to secure new orders. The effects were even more pronounced on new export orders, which were also impacted by higher transportation costs. New business from abroad fell markedly for the second month running.

There were widespread reports of rising fuel and oil costs during April, with higher transportation rates also mentioned. As a result, input costs increased rapidly, with the rate of inflation accelerating further to the fastest in 15 years. More than half of respondents signaled a rise in input prices during the month. In turn, output charges were also increased sharply. Here too the rate of inflation was the fastest since April 2011.