Illustrative photo.

"Vietnamese manufacturers are increasingly able to operate normally as pandemic disruption fades, with May seeing sharp accelerations in the growth of output and new orders, in turn boosting employment and purchasing. There is also growing confidence that firms won't have to contend with Covid-19 issues going forward" - said Andrew Harker, Economics Director at S&P Global Market Intelligence.

"That said, the lockdowns in China did impact the sector in two principal ways - limiting export demand and causing further delivery delays. Firms will therefore hope that business in China can also return to normality soon, providing a further boost to the recovery in Viet Nam" - he said.

Purchasing activity was also ramped up in response to new order growth, with the rate of expansion quickening to a three-month high. Despite a sharp rise in input buying, stocks of purchases continued to fall as inputs were used in the production process. Pre-production inventories were down for the second month running, albeit marginally.

Rates of inflation remained elevated despite showing some signs of easing during May. Both input costs and output prices rose at the slowest rates in three months, but in each case, inflation was still well above the series trend. Rises in costs for oil and gas were highlighted by respondents, with increased shipping charges also adding to inflationary pressures.

In turn, firms passed higher prices on to their customers./.