Vietnam factory output expands as PMI holds above 50 in Jan

Vietnam’s manufacturing sector began 2026 with stronger output growth, supported by steady demand, rising employment and robust purchasing activity, even as headline PMI eased slightly in January.

S&P Global Vietnam Manufacturing Purchasing Managers’ Index stood at 52.5 in January 2026, down from 53 in December but remaining firmly above the 50 threshold, signalling a continued improvement in business conditions for the seventh straight month.

Production expanded sharply, driven by faster growth in new orders and a renewed, albeit modest, rise in export demand, including orders from other Asian markets such as India. Manufacturers responded by increasing hiring for a fourth consecutive month and stepping up purchasing to meet higher output requirements.

“It was a solid start to the year for the Vietnamese manufacturing sector as firms ramped up output in response to greater new orders and as part of efforts to meet client needs in a timely manner. Carrying on the momentum built towards the end of 2025, the sector looks to be in good shape for a successful 2026,” said Andrew Harker, economics director at S&P Global Market Intelligence.

Inflationary pressures, however, remained elevated. Input costs rose sharply due to strong demand and material shortages, while selling prices increased at the fastest pace since April 2022. Despite this, sentiment improved further, with 55 per cent of firms expecting output to rise over the next 12 months.

“The one potential headwind for firms, however, is the strength of inflationary pressures. Supply shortages of materials pushed up prices sharply again in January and firms responded accordingly by hiking their selling prices to a greater extent. So far demand has remained resilient in the face of these pressures, but we will need to keep an eye out for any softening of new order growth in the months ahead,” Harker added.

Vietnam’s manufacturing sector started 2026 on a strong footing, with output, new orders and employment expanding despite a slight dip in PMI.
January PMI eased to 52.5 but stayed in expansion for a seventh month.
Rising domestic and export demand lifted hiring and purchasing, though input costs and selling prices climbed sharply amid material shortages.

Fibre2Fashion News Desk (HU)