The textile and garment exports fell by nearly $1.2 billion in September
According to the socio-economic reports of the third quarter and the first nine months of 2022 of the General Statistics Office, the export turnover of Vietnam’s textile and garment industry (including fibers, yarns and fabrics) in the first nine months of the year reached 32.9. billion USD, up 19.5% over the same period last year.
However, this industry has begun to show signs of being affected by inflation and the global economic recession when the export turnover in September 2022 has decreased by nearly 1.2 billion USD, equivalent to a decrease of 27% compared to the previous year. with August, down to just $3.2 billion.
This is the month with the lowest export turnover of the textile and garment industry since March, even if February is not affected by the Lunar New Year holiday, this will be the month with the lowest export turnover since March. from November 2021.
Source: VIRAC, GSO
The textile and garment industry is forecast to face difficulties in the fourth quarter of 2022 and the first half of 2023
Textile and garment growth will slow down in the fourth quarter of 2022 due to the impact of inflation and falling demand
Le Tien Truong, Chairman of the Board of Directors of Vietnam National Textile and Garment Corporation (Vinatex) forecast that Vietnam’s textile and garment export growth will slow down in the last few months. 2022 due to inflation and falling demand.
Besides, because Vietnam’s macro economy is very stable, the VND has a high value. Therefore, compared to competitors that lose value for money such as India or China, Vietnam’s textile and garment exports have lost their competitive advantage while demand is low. Therefore, the last 4 months of 2022 and the first half of 2023, the textile and garment market is forecasted to be quite quiet.
The number of orders decreased
Regarding orders, VIRAC believes that textile companies will face difficulties from the fourth quarter to the first months of 2023 due to concerns about inflation, economic recession and high inventories of customers.
The number of orders in the fourth quarter was 25-50% lower than in the second quarter, equivalent to a 15-20% decrease in revenue compared to the same period in 2021 due to the current inventory level in import markets. high.
According to research and synthesis, many companies have started to receive orders for the first quarter of 2023, but the number of orders received is still far from the operating capacity of these companies.
Domestic garment manufacturers are forecasted to suffer a net loss due to facing many difficulties
In the US and Europe, although fuel prices in the world have decreased, inflation in these markets is still high, causing people to tighten their spending. This will adversely affect the textile and garment export of Vietnamese enterprises because these are the two markets that account for a large proportion of the textile and garment industry’s export. Exports to Japan and Korea also tended to decrease, but to a lesser extent.
In addition, textile enterprises are also facing the problem of product selling prices, even outsourcing orders are being pressured. Yarn manufacturers said that the product’s selling price has decreased by 8% compared to August.
On the other hand, on the impact of exchange rate, although textile companies all record their revenue in USD, most of the expenses are also recorded in USD such as raw material costs, logistics costs and interest expenses. The USD/VND exchange rate is forecasted to continue to decrease in the second half of 2022. This will continue to negatively affect the business results of textile enterprises, especially those with costs in USD. as high as Century Yarn and Thanh Cong Textile.
With the above effects, the textile and garment industry is forecast to slow down until the first half of 2023.
Read more news about the textile market situation in the first 6 months of 2022 here: https://viracresearch.com/textile-and-garment-market-in-the-first-6-months-of-2022/
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