The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) dipped below the 50.0 no-change mark for the first time in three months during December 2024, posting 49.8 from 50.8 in November, according to the latest report released by S&P Global on January 2.

The reading signaled a fractional deterioration in overall business conditions at the end of this year.

The worsening in the health of the sector was recorded in spite of increases in output and new orders, as firms scaled back their employment and stocks of purchases.

Although both output and new orders increased in December, rates of expansion were only slight and the weakest in the respective three-month growth sequences. Some firms signaled demand improvements, while others reported that market conditions had softened.

While total new business continued to rise, new export orders decreased for the second month running and at a solid pace.

Concerns about global market instability and uncertainty caused a drop in confidence regarding the year-ahead outlook for production. Sentiment fell markedly in December and was the lowest since May 2023. Hopes for increases in new orders, an improvement in economic conditions and the resolution of some of the conflicts around the world meant that firms were on balance optimistic that output will expand, however.