Fashion
Vietnam manufacturing grows in March as inflation pressures rise
A key feature of the month was a sharp surge in inflation. Rising oil prices pushed up freight and transportation costs, leading to the fastest increase in input costs since April 2022. In response, manufacturers raised selling prices at the steepest pace in nearly 15 years, S&P Global said in a press release.
The surge in prices began to weigh on demand. While total new orders continued to rise, growth slowed significantly, partly supported by advance purchasing by clients seeking to avoid further price increases. Export orders, however, declined markedly after stabilising in February.
Vietnam’s manufacturing sector expanded for a ninth month in March 2026, with PMI at 51.2, though growth slowed amid surging inflation.
Rising oil prices drove input costs to a two-year high, prompting the steepest rise in selling prices in nearly 15 years.
Demand weakened, exports declined, and firms cut hiring.
Supply delays worsened, while business confidence fell to a six-month low.
Production growth also moderated, recording its weakest expansion since June 2025, even as output continued to rise for the eleventh consecutive month. Firms responded to rising costs and softer demand by cutting back on purchasing activity, ending an eight-month expansion phase, and reducing employment for the first time in six months.
Supply chain pressures intensified, with suppliers’ delivery times lengthening to the greatest extent in four years, largely due to higher fuel costs and transportation delays. Backlogs of work increased slightly as firms struggled with labour shortages and material constraints.
Andrew Harker, economics director at S&P Global Market Intelligence, said: “Given the country’s reliance on oil imported from the affected region, the impact on prices and supply chains would have been expected to some extent. The rate at which input cost inflation accelerated though, and the subsequent increase in selling prices shows the immediate and marked effects that firms are experiencing.”
“Output and new orders remained in expansion territory in March, but rates of increase were well down on February and at least some of the growth seen was due to customers placing advanced orders to try to get ahead of price rises. The near-term outlook therefore appears bleak, unless a speedy resolution to the war and the disruption through the Strait of Hormuz can be achieved,” added Harker.
Business confidence fell to a six-month low amid concerns over inflation, supply disruptions and weakening global demand, although firms continued to expect output growth over the coming year, supported by underlying demand trends.
Fibre2Fashion News Desk (SG)