Weakening global demand is hurting Vietnamese garment makers: industry official
HANOI, Nov 7 (Reuters) – Vietnam’s garment industry is expected to face falling orders from its major markets in the next two quarters, the national textile and clothing association said on Monday, in a context of high inflation which is dampening global demand.
Textiles and clothing are the Southeast Asian country’s second largest export source, after smartphones. The country is among the world’s largest manufacturers of brands such as Nike, Calvin Klein, Mango, Zara and H&M.
“We are concerned that companies will face further difficulties in the fourth quarter of this year and the first quarter of 2023 due to the effects of weaker demand globally,” the secretary general told Reuters. Vietnamese Textile and Clothing Association, Truong Van Cam, in an interview.
He added, however, that this year’s exports are still expected to meet the target of $43.0 billion to $43.5 billion.
The industry’s exports in the first 10 months of this year totaled $37.7 billion, up 16.9 percent from a year earlier and accounting for 12 percent of the country’s total exports, according to official data.
“High inflation in many key Vietnamese markets such as the US, EU and Japan has hurt demand, including demand for Vietnamese garments and textile products,” he said, noting that local businesses have had to cut around 10% to 15% of their production and many have been forced to reduce their workforce.
The weakening of the dong currency has also aggravated the difficulties faced by some garment manufacturers, as imports of their raw materials are more expensive, he said. But he added that the exchange rate impacts are limited as the garment industry now runs a trade surplus.
The Vietnamese dong has lost 8% against the dollar since the start of the year.
Earlier this week, Taiwanese shoemaker Footgearmex Footwear Co. Ltd. said in a memo to its employees that it was preparing to lay off two-thirds of the workforce at its Ho Chi Minh City plant, citing a “drying up of orders and financial problems”. .”
Reporting by Khanh Vu; Editing by Kanupriya Kapoor
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