The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) dropped back below the 50.0 nochange mark in April, after having signaled growth for the first time in four months during March, according to the latest report released by the S&P Global on May 5.

At 45.6, the latest reading was down from 50.5 and signaled a marked monthly deterioration in the health of the sector. In fact, business conditions worsened to the largest extent since May 2023.

Manufacturing new orders decreased markedly in April, reversing the expansion seen in March. Moreover, the rate of contraction was sharp and the fastest in almost two years. Respondents indicated that the drop in new orders reflected the introduction of tariffs by the US and fluctuations in international market conditions.

New export orders fell even more quickly than total new business amid the declaration of tariffs. The sixth successive decrease in new business from abroad was the most marked since June 2023. Tariffs, and the reduction in new orders led to a renewed fall in production following a rise in March. The decline in output was marked and the fastest since January 2023.

Manufacturers were also concerned about the impact of tariffs on production in the months ahead. Business confidence dropped sharply and was the lowest since August 2021.