The index, which is equivalent to the June rate, signals a further marked strengthening of business conditions in the local manufacturing sector, said S&P Global, adding marked improvements were seen across the consumer, intermediate and investment goods categories.

New orders increased for the fourth month running in July on the back of stronger market demand and an increase in customer numbers. New export orders also rose, albeit at a much softer pace than total new business.

With new orders rising sharply, manufacturers ramped up production in July. Moreover, the rate of expansion in output quickened from that seen in June and was the second-fastest on record, just behind that seen in the opening month of data collection in March 2011.

Mr. Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “The fact that the Vietnamese manufacturing sector was able to sustain the strong expansion seen in June through into July adds to optimism that we are at the start of a good spell of growth that will help drive the wider economy forward.

"The main issue for firms at present is keeping up with demand. While production was ramped up, firms were still forced to dip into warehouse stocks to help meet new order requirements, resulting in one of the sharpest depletions of inventories on record. Manufacturers will need to expand workforce numbers more quickly and continue to secure additional materials should current trends in new orders be sustained in the months ahead."

The results of the survey are in tandem with statistics recently released by the General Statistics Office of Viet Nam. Accordingly, the country's index of industrial production (IIP) obtained its positive growth in July at 0.7 percent over June and 11.2 percent compared to the same period last year./.