Vietnam’s manufacturing sector demonstrated signs of recovery in October, following the severe impact of Typhoon Yagi in September. The Purchasing Managers’ Index from S&P Global climbed to fifty-one point two, indicating expansion after a contraction of forty-seven point three in the previous month. This rise reflects renewed growth in production and new orders as factories resumed operations post-storm.

Andrew Harker, Economics Director at S&P Global Market Intelligence, noted that October’s data showed the beginning of recovery from the disruptions caused by the typhoon. However, the pace of recovery remains moderate due to lingering disruptions from the storm and subsequent flooding, which have affected supplier deliveries and created backlogs in production. Harker anticipates stronger growth as more manufacturers reach full capacity by the end of the year.

The report also highlighted rising input costs driven by currency fluctuations and higher prices for commodities such as oil and metals. While some of these increased costs have been passed on to consumers, inflationary pressures remain relatively low. Purchasing activity aligned with new orders and expected production increases saw modest growth, and input stock levels declined at a slower rate compared to September, as firms utilized inventory to support production.

Despite these challenges, manufacturers remain optimistic about the future, driven by rising sales and hopes for stable market conditions. However, overall sentiment has dipped to a nine-month low, with some firms expressing concerns about uncertainties related to the upcoming United States presidential election. The sector continues to navigate these complexities as it strives for a robust and sustained rebound.

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