Storms and floods caused some disruption to Vietnam’s manufacturing industry in the past month, but the overall situation is still expanding, according to S&P Global.
The newly released report of S&P Global said that the Purchasing Managers’ Index (PMI) in November of Vietnam’s manufacturing industry reached 53.8 points. This result decreased slightly compared to October but continued to improve, despite the harsh weather.
According to the American data analyst, businesses participating in the survey reported that major storms disrupted supply chains and the ability to complete work on time. Supplier delivery times lengthened, reaching highest level since May 2022.
In addition, raw material costs also escalate when supply is limited. Initial prices have increased, at the second fastest rate since July 2024. Companies partly transfer the cost burden to customers, by increasing output prices.
Steel factory in Dung Quat in April 2024. Image: Giang Huy
Despite weather challenges, Vietnam’s manufacturing industry has generally improved for 5 consecutive months. Mr. Andrew Harker, Chief Economics Officer at S&P Global Market Intelligence, said sustained growth has ushered in a positive year-end.
“Growth was recorded despite disruptions to supply chains and production lines due to stormy weather in recent weeks,” he said. Production output in November increased for 7 consecutive months, although some businesses said the weather had limited operations.
November was the third consecutive month that orders improved, although it slowed down compared to October. Particularly, export orders increased faster, at the highest rate of 15 months. The business said demand was higher in mainland China and India.
Forecasting the situation in 2026S&P Global said expectations of increased new orders and hopes of milder weather conditions supported optimism about the output outlook for next year. Accordingly, nearly half of survey respondents forecast an increase in output. Overall business sentiment hit a 17-month high.
HSBC’s recent Global Trade Pulse survey also said that 73% of Vietnamese businesses questioned felt more clear about the impact of trade policies on business activities compared to 6 months ago.
Mr. Surajit Rakshit, Country Director of Global Trade Solutions at HSBC Vietnam, commented that businesses are adapting to the current context. “While concerns about revenue have decreased slightly compared to before, they are still aware of potential risks,” he said.
Therefore, companies have taken many measures to respond to global trade fluctuations such as shifting costs to customers, increasing operational efficiency or productivity, renegotiating contracts and investing in automation and AI.
They also increased exports to Singapore, mainland China, France, Thailand and Japan. At the same time, there is increased dependence on regional and European trade corridors. 50% of companies with revenue of 500 million – 2 billion USD focus more on Southeast Asia; 46% of this group is headed to East and North Asia. Overall, up to 90% of Vietnamese businesses surveyed feel confident in being able to develop international trade in the next 2 years, compared to the global average of 87%.