The S&P Global Vietnam Manufacturing Purchasing Managers' Index™ (PMI) remained above the 50.0 no-change mark in August and signaled a second consecutive monthly improvement in the health of the manufacturing sector, according to the latest report released by the S&P Global on September 3.

That said, at 50.4, the PMI was down from 52.4 in July and registered only a marginal strengthening in business conditions.

The main positive from the latest survey was a sustained expansion of manufacturing production, with growth recorded for the fourth-month running. The increase in August was solid, albeit slower than that seen in July. Those firms that raised output did so in response to positive new order inflows at their units, while the slowdown in the upturn reflected reports of a subdued demand environment.

New orders decreased in August, after having risen for the first time in four months during July. Demand conditions were reportedly muted, in part due to US tariffs. Issues around tariffs meant that new export orders continued to fall, the tenth month running in which this has been the case. The solid reduction seen in August was sharper than that seen for total new business.

The report also shows that business confidence strengthened to a six-month high in August, albeit remaining below the series average. A number of respondents predicted an improvement in new orders over the coming year, supporting optimism around output.