Blog

The Vietnamese manufacturing sector continued expansion in October, although price increases and supply issues limited growth in some cases.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index ticked up to 52.3 points in October from 51.9 points in September, pointing to a further modest monthly strengthening in the health of the sector at the start of the fourth quarter. Business conditions have now improved in 16 consecutive months.

The overall improvement in operating conditions was limited by slower rises in output and new orders. Total new business rose for the sixth month running, despite falling new export orders weighing on growth. The rate of expansion was solid, but the slowest in the current growth sequence.

Manufacturing production expanded again in October as new orders increased on stronger customer demand. However, growth also eased here, hitting a six-month low. Some respondents said difficulties obtaining raw materials had limited production growth.

Transportation difficulties were evident in data on suppliers' delivery times, which lengthened markedly and to the largest extent since April. Rising fuel prices and poor weather conditions were among the factors leading to transportation delays, according to respondents.

Difficulties importing goods and the use of inputs to support production meant that stocks of purchases decreased solidly, despite sustained growth of input buying as companies made efforts to secure goods to support production.

Rising transportation costs were also central to the latest rise in input prices as higher costs for oil pushed up fuel prices. The rate of inflation quickened for the second month running and was the fastest since June, albeit still well below the spike seen following the outbreak of war in the Middle East. In turn, output prices also increased at a sharper pace, following only a slight rise in September.

Employment fell for the third consecutive month in October, though only slightly, with some firms citing staff resignations. Despite the smaller workforce, slower new order growth and more efficient processing of outstanding work allowed firms to reduce backlogs modestly.

Stocks of finished goods also fell as firms sold warehoused goods to draw down inventories. Post-production stocks decreased markedly, though slightly less than in September.

Optimism about better raw material availability and further improvements in market conditions supported a positive 12-month outlook for production. Sentiment hit an eight-month high but remained weaker than before the war in the Middle East.

Andrew Harker, economics director at S&P Global Market Intelligence said, "Vietnamese firms are battling to maintain growth at present amid headwinds that are making their operations more challenging. New orders continued to rise in October, feeding through to a solid increase in production, but in both cases rates of expansion slowed from September."

"The limits to growth were often due to the international environment. Fuel and transportation costs rose amid higher oil prices, while companies reported difficulties importing and exporting products. While firms are able to maintain improvements for now, they will be hoping for a more conducive environment to growth in the months ahead," he added.

Hanoi has directed municipal departments to implement government guidelines for classifying green projects, circular economy initiatives, and Environmental, Social, and Governance (ESG) frameworks, paving the way for eligible businesses to access interest rate subsidies.

Mr. Bui Duy Cuong, Vice Chairman of the Hanoi People’s Committee, signed Official Dispatch No. 6035/UBND-NNMT regarding the implementation of Prime Minister Decision No. 46/2026/QD-TTg dated September 17, 2026 (Decision 46).

The decision provides technical guidelines for classifying green projects, evaluating circular economy criteria, and applying ESG criteria.

Under Decision 46, enterprises, business households, and individual business entities executing certified green or circular projects and presenting ESG implementation reports will qualify for interest rate support considerations under applicable regulations.

Under the city’s directive, the Hanoi Department of Agriculture and Environment will serve as the focal agency, collaborating with relevant departments, sectors, and commune-level People's Committees to disseminate the decision.

The department is tasked with guiding the implementation of environmental and agricultural criteria for green and circular projects under its state management scope.

The department must compile the list of projects under the scope of Decision 46 to report to the Ministry of Agriculture and Environment. It will advise the municipal People's Committee on publishing the certified list of green, circular, and ESG-compliant projects biannually on the city's portal on June 30 and December 31.

Additionally, the department will inspect, monitor, and address violations regarding independent evaluation entities operating in agriculture and environment sectors, while supervising project compliance maintenance over time.

Concurrently, the Hanoi Department of Finance is assigned to lead data integration for investment management systems and oversee the implementation of governance frameworks. It will assess financial resources and state budget capabilities according to decentralized authority, alongside mobilizing alternative financial mechanisms to support green and circular programs.

The Department of Finance will also inspect and monitor independent rating agencies and ensure project compliance according to legal auditing and administrative violation frameworks.

The Hanoi Department of Industry and Trade will oversee project implementation across energy, processing, and manufacturing sectors. The department is tasked with promoting resource-efficient, low-emission, and sustainable production models, while evaluating criteria for industrial symbiosis and circular linkages.

The Hanoi Department of Construction will handle projects in construction, urban development, technical infrastructure, and transport, promoting resource-saving materials, low-carbon building technologies, and sustainable urban solutions.

Under Decision 46, a green project must meet specific eligibility requirements across designated sectors. Attached technical appendixes outline requirements for ten energy project categories, three transport categories, two construction categories, three water resource categories, 12 agriculture, forestry, fisheries, and biodiversity categories, six processing and manufacturing categories, and nine environmental service categories.

For circular economy projects, the regulations define eight project groups for circular design and manufacturing, two for circular utilization, five for resource recovery, and four for industrial symbiosis and circular integration.

Vietnam’s average retail electricity price will fall 2% starting Sunday, the first decrease in nearly two decades of increases.

Average retail price is now at VND2,159.90 per kilowatt-hour, according to the Vietnam Electricity.

This is the first decrease in the average electricity price in nearly 20 years, excluding five rounds of reductions in electricity bills and prices to support people and businesses affected by Covid-19.

Between 2023 and 2025, electricity prices rose by 18.2% in four adjustments. The last increase was made in May 2025.

Before those increases, electricity prices had remained unchanged for more than four years, from March 2019 to May 2023.

EVN said the reduction followed a review of its operations and efforts to calculate and cut costs as much as possible. The adjustment is intended to support people and businesses, help stabilize the macroeconomy and ensure social welfare.

At a National Assembly session on economic and social issues on the morning of Oct. 31, Deputy Prime Minister Nguyen Van Thang said the government had directed EVN to cut costs as much as possible to lower average retail electricity prices by about 2%.

He said the electricity price reduction, together with a plan to cut the special consumption tax on gasoline to zero, would provide about 0.07 percentage points of additional room to control inflation and work toward the 4.5% target set by the National Assembly.