The rate of expansion in the Vietnamese manufacturing sector accelerated sharply at the end of the second quarter with new orders rising at one of the fastest rates on record, according to a report released by S&P Global Market Intelligence on Monday.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index rose sharply to 54.7 in June from 50.3 in May.

This signaled a third consecutive monthly improvement in the health of the sector, the report said.

An improvement in demand was reported, with some customers coming back to request additional orders in June. New export orders meanwhile increased at the fastest pace since February 2022, according to the report.

The acceleration in growth of new orders was matched by manufacturing production, with June seeing the steepest increase in output for just over five-and-a-half years.

Andrew Harker, economics director at S&P Global Market Intelligence, said, "The growth spurt was accompanied by higher cost burdens, with increased transportation costs in particular acting to push input price inflation to a two-year high."

"Rising inflation could act to dampen demand further down the line, but for now firms will be enjoying the influx of work experienced in June," he said.