HÀ NỘI — New orders continued to fall in May as US tariffs impacted demand for exports, according to the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) released on Monday.

PMI posted below the 50.0 no-change mark for the second consecutive month in May, but rose to 49.8 from 45.6 in April to signal a near-stabilisation of business conditions in the sector.

As was the case in April, new orders decreased during May, with survey respondents linking the latest fall to tariffs and subdued market demand, the report wrote.

However, greater stability around tariff policies reportedly helped to support the renewed rise in production, while capacity improvements were also mentioned. Business confidence improved in May amid more stable tariff policies.

According to the Economics Director at S&P Global Market Intelligence, Andrew Harker, the news around tariffs continues to play a key part in determining trends in the Vietnamese manufacturing sector.

“May saw a more stable picture in terms of US tariff policies than April, helping lead to a renewed expansion in output and improved business confidence. That said, manufacturers remained wary of the impact of tariffs and again saw a marked reduction in new export orders which contributed to a continued decline in new business overall,” he added.

Another noteworthy aspect of the latest PMI survey was a first fall in input costs for almost two years as suppliers offered discounts in a subdued demand environment, he said.

"As we approach the mid-point of the year, eyes will remain on US tariff policy to see how the Vietnamese manufacturing sector will be affected." — VNS