Positively, the strength of the expansions in output and new orders were sufficient to enable firms to take on extra staff and build inventories ofinputs, said Andrew Harker, economics director at S&P Global Market Intelligence in a release on Monday.

"Whether these growth rates can be sustained in the months ahead remains to be seen, but there is clearly some positive momentum in the sector at present," he noted.

"Inflationary pressures built again, however, and are now relatively elevated. For now, customers are happy to look through price increases and commit to new orders, but this may start to wane should rates of inflation pick up further," Harker added.

A renewed rise in stocks of purchases was also signalled, while business confidence hit a 16-month high. Meanwhile, inflationary pressures also intensified, with both input costs and output prices increasing at sharper rates than in September, S&P Global reported.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) rose to 54.5 in October, up markedly from a reading of 50.4 in September and signalling a solid monthly improvement in the health of the sector.

In fact, business conditions strengthened to the largest degree since July 2024. All five of the constituent parts of the headline PMI contributed to the upwards movement in the index in October.

New orders increased for the second consecutive month, and at a sharp pace that was much stronger than seen in September. Moreover, the rate of expansion was the fastest since July 2024 as customer demand improved.

New export orders contributed to growth of overall new business, rising for the first time in a year, albeit only slightly.

Manufacturers responded to higher new orders by ramping up production, which increased at the sharpest pace since July 2024. Output has now risen in each of the past six months.

As well as seeing sharper growth of production in the latest survey period, firms were also more optimistic regarding the 12-month outlook for output.

Business sentiment strengthened to a 16-month high amid confidence that new orders will continue to rise and alongside plans to expand production capacity.

The increase in new orders and associated expansion of output requirements also resulted in a rise in employment in October, the first in just over a year.

Manufacturers also expanded their workforce numbers in response to emerging signs of pressure on operating capacity.

Backlogs of work increased for the first time in 10 months during October, and at a solid pace that was the fastest in just over three-and-a-half years.

As well as higher new orders, some firms also linked backlog accumulation to stormy weather conditions. Adverse weather and associated flooding also contributed to longer suppliers' delivery times.

Lead times lengthened solidly, and to the greatest extent since July. Higher new orders and greater production requirements encouraged firms to expand their purchasing activity, the fourth month running in which this has been the case.

The rise in purchasing fed through to an accumulation of stocks of purchases, the first in just over two years. Stocks of finished goods, meanwhile, decreased as firms used inventories to help meet order requirements.

That said, the ramping up of production during the month meant that inventories decreased only slightly, and to the smallest degree since January 2024. The rate of input cost inflation accelerated sharply in October and was the strongest since July 2024.

Around 27% of respondents signalled a rise in input prices, reporting highermarket rates for raw materials and supply shortages. In turn, the rate of output price inflation also quickened and hit a 40-month high, S&P Global added.

Standard Chartered on October 30 raised its Vietnam GDP growth forecast to 7.5% for 2025 from the previous 6.1%, and to 7.2% for 2026 from 6.2%, following HSBC's revising up its prediction to 7.9% (from 6.6%) and 6.7% (from 5.8%), respectively.

Meanwhile, EuroCham Vietnam's newly-released Q3 Business Confidence Index (BCI) editition shows a renewed surge of optimism among European firms operating in the country.

The index climbed to 66.5, surpassing pre-tariffs level and reaching its highest in three years – showcasing resilience and adaptability amid global headwinds and evolving U.S. tariff pressures.