Vietnam manufacturing poised for positive growth in Q3
Nearly 80% of manufacturing and processing firms expect business conditions in the third quarter to remain stable or improve compared to the previous quarter.
THE HANOI TIMES — Despite a slight contraction in Vietnam’s manufacturing PMI, optimism is rising among businesses, with over one-third expecting better performance in the third quarter, according to a new survey by the General Statistics Office. Foreign-invested firms were the most upbeat, while industrial output in the first half of 2025 saw its strongest growth in five years, fueling confidence across the sector.
The GSO’s business sentiment survey found that 37.3% of manufacturing and processing enterprises anticipate improved performance in Q3, while 43.5% expect conditions to remain stable. Only 19.2% forecast more difficulties ahead.
Workers at the ANMI mechanical tools manufacturing workshop. Photo: Khac Kien/The Hanoi Times
Foreign direct investment (FDI) enterprises showed the highest confidence, with 81% expecting stability or improvement. The corresponding figures were 79.8% for state-owned firms and 80.7% for non-state enterprises.
By business type, 85.7% of state-owned companies projected better performance in Q3 compared to Q2, followed by 74.5% of FDI firms and 68.9% of non-state companies.
In terms of Q2 outcomes, 36% of surveyed firms reported improved conditions compared to the first quarter. Meanwhile, 43% saw no change, and 21.3% continued to face challenges.
The positive outlook is underpinned by robust industrial production growth. The Index of Industrial Production (IIP) rose an estimated 10.3% year-on-year in Q2, with the manufacturing and processing sector alone growing by 12.3%. For the first half of 2025, the IIP expanded by 9.2%, marking the highest growth rate since 2020.
The industrial sector’s performance contributed 2.64 percentage points to Vietnam’s overall GDP growth in the first six months of the year. As a result, GDP rose by 7.52%, the highest mid-year growth rate recorded since 2011.
However, not all indicators point in the same direction. According to S&P Global, Vietnam’s Manufacturing Purchasing Managers’ Index (PMI) stood at 48.9 in June, marking the third consecutive month below the 50-point threshold that signals contraction.
Andrew Harker, Economics Director at S&P Global Market Intelligence, attributed the downturn to weakened international demand for Vietnamese goods. Nevertheless, he highlighted a positive trend: production output increased for the second straight month, and business sentiment showed signs of recovery.
“Business sentiment has recovered to some extent in recent months, but optimism is largely built on hopes for a more stable outlook in the near future,” said Harker.
