Hanoi, Apr 3 (IANS): Vietnam's manufacturing sector slipped back into contraction in March as new orders continued to fall, according to a report released by S&P Global Market Intelligence on Monday.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) dipped to 47.7 in March from last month's reading at 51.2, falling back below the 50-point level separating expansion from contraction, reports Xinhua news agency.

Overall new orders were down for the fourth time in the past five months due to "relatively subdued demand", while new business from overseas markets dipped for the first time in three months.

The decline in new work led to falls in manufacturing output and staffing levels, said the report.

Amid signs of inflation pressures easing at the end of the first quarter, raw material prices rose at the slowest pace since last October, making companies increase their charges at the softest pace in a third straight month of rises, the report found.

However, the renewed falls in March will hopefully be just a temporary problem as firms remain confident about demand improvements and stable market conditions in the year ahead with some even pointing to business expansion plans, according to Andrew Harker, Economics Director at S&P Global Market Intelligence.

S&P Global Market Intelligence is forecasting a rise in Vietnam's industrial production of 6.6 per cent in 2023.

The PMI index measures the activity level of purchasing managers in the manufacturing sector.

A reading above 50 indicates expansion on a monthly basis in the sector, and a reading below implies contraction.