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Supply Chain

Vietnam's factory operations hit as supply chain snags multiply

Manufacturing PMI dips as labor shortages and input costs weigh on recovery

Workers take a break on a tract they'll transform into factories in Dong Nai, Vietnam, in April 2022. Supply chain snarls hitting their employer, An Phong, and other companies have slowed the economy's rebound. (Photo by Lien Hoang)

HO CHI MINH CITY -- Trinh Khanh Ha wasn't able to get circuit boards from China for the prosthetic arms her company makes next door in Vietnam, so she went back to an older model before finally finding a domestic supplier. It is just one of many ways producers in Vietnam are adapting as supply chain snags -- from shipping delays to war-fueled materials inflation to a COVID labor crunch -- weigh on manufacturing.

A top exporter of goods in sectors from textiles to technology, Vietnam is bouncing back from the pandemic, but several headwinds are slowing down its factories. Vietnam Electricity recently warned of power disruptions, and the spread of the omicron variant, while less severe, sent swaths of the workforce home to self-isolate. The state responded to the tight labor market by raising the overtime cap, a dramatic move that the ruling communist party had long resisted in order to protect workers.

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