The reading signaled a modest improvement in the health of the sector, and one that was the weakest since November last year. Business conditions have now strengthened in each of the past 28 months.
Vietnam's PMI stood at 51.6 in March.
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"New orders continued to rise solidly amid a strong export performance, providing some optimism that output will continue to rise in the near future," Harker added.
A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.
Business conditions in Vietnam continued to improve at the end of the first quarter of 2018, although the rate of expansion eased from that seen in February. Output and employment rose modestly over the month, while new orders continued to increase at a solid pace, buoyed by stronger export growth. The rate of input cost inflation eased sharply, with output prices also rising at a slower pace in March.
Where output rose, this was mainly linked to higher new orders. The rate of growth in new business also eased, but remained solid amid reports of improved client demand. The rise in overall new orders was supported by a faster increase in new business from abroad, the most marked since last October.
Slower new order growth enabled firms to work through outstanding business again in March. The rate of depletion accelerated to the strongest for three years.
Manufacturers raised their staffing levels for the twenty-fourth successive month in response to higher output requirements. That said, the rate of job creation eased to a seven-month low.
Although input prices continued to rise sharply in March, the rate of inflation eased markedly from February and was the slowest since August 2017. Where input costs increased, this was linked to higher market prices. Output price inflation also eased amid competitive pressures. Selling prices have now risen in each of the past seven months.
Suppliers' delivery times lengthened marginally, with raw material shortages and shipping delays reportedly behind the deterioration.
In line with the picture for output and new orders, purchasing activity rose at a weaker pace during March. The increase was still solid, however, extending the current sequence of growth to 28 months.
Inventory holdings were broadly stable during the month. Stocks of purchases were little-changed following three months of expansion, while stocks of finished goods stabilized after eight months of decline. Panelists indicated that slower increases in output and new orders led to caution around stock holdings.
Vietnam`s GDP growth rate in the first quarter of 2018 is expected to reach a 10-year high with over 7.41%, stated in a report of the Ministry of Planning & Investment (MPI) on March 27.
Industry - construction, as stated in the report, are considered the driving force for economic growth with increasing rate of 11%.
The agricultural sector continues to maintain positive growth thanks to favorable weather condition and the restructuring process, while the service sector has been growing, thanks to stable macro-economy and high consumption, informed the report.
