FACTORY PRICES POST FASTEST RISE IN NEARLY 15 YEARS

Shoppers browse for food at a supermarket in HCMC - PHOTO: LH

HCMC – Selling prices in Vietnam’s manufacturing sector rose at the fastest pace in nearly 15 years in March, driven by a sharp increase in input costs linked to the U.S.-Israel war effort against Iran in the Middle East, according to S&P Global.

The S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) fell to 51.2 in March from 54.3 in February, indicating slower growth in operating conditions while remaining above the 50-point threshold for a ninth consecutive month.

Higher oil prices pushed up costs for fuel, freight and transportation. Nearly half of surveyed firms reported rising input costs, with inflation reaching its highest level since April 2022.

Andrew Harker, economics director at S&P Global Market Intelligence, said that rising oil prices linked to the conflict had driven input cost inflation and selling prices higher, reflecting immediate effects on the sector.

Manufacturers passed on higher costs to customers. Output prices increased at one of the sharpest rates since the survey began in 2011, marking the steepest rise in almost 15 years.

Rising prices weighed on demand. New orders continued to increase but at the slowest pace since September. Some firms reported advance purchases by clients seeking to avoid further price hikes. Export orders declined after remaining stable in February.

Production expanded for the eleventh straight month but at the weakest pace since June 2025, in line with slower growth in new business.

Firms reduced purchasing activity as costs rose. Input buying fell markedly, ending an eight-month expansion. Stocks of purchases also declined. Suppliers’ delivery times lengthened at the sharpest rate in four years, with firms linking delays to higher fuel costs.

Employment fell for the first time in six months. Companies cited difficulties replacing departing workers and a reduction in temporary staff.

Backlogs of work increased slightly, the first rise in four months, as firms faced material shortages and lower staffing levels. Some manufacturers used finished goods inventories to meet demand, leading to a drop in post-production stocks.

Business confidence weakened to a six-month low. Firms cited concerns over the impact of Middle East tensions on demand, prices and supply chains, though many still expect output to increase over the coming year.

Source: The Saigon Times