Businesses invest in technology to increase labor productivity. (Photo: Duc Duy/Vietnam+) Hanoi (VNA) - A series of negative factors from the fourth quarter of 2022, such as the global economic slowdown and high inflation, suggest that the demand for textile products will decrease in 2023.
Many businesses have been nearly “exhausted” after more than two years of facing the COVID-19 pandemic (from 2020 to early 2022). As existing issues remain unresolved, new difficulties continue to arise.
Not just small businesses, but many giants in the manufacturing sector, such as garment-textiles and footwear, also expressed concerns over a pessimistic picture in the first quarter of this year.
This situation could even extend into the second quarter as a decrease in orders negatively affects the production and operational efficiency of businesses, as well as their overall contribution to the economy.
Therefore, identifying these difficulties and challenges to restructure production processes and value chains is essential.
Along with this, optimising market segments and customers to overcome these difficulties and challenges is one of the top priorities for businesses when dealing with management volatility.
Order pressure
As a large enterprise with over 1,000 employees and workers, Saigon 3 Joint Stock Company is not only a big suppler in the domestic market, but also present in major markets such as the United States, Europe, and Japan.
However, in January-March 2023, the company encountered adverse market fluctuations.
Pham Xuan Hong, Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association, said that albeit these setbacks, many garment-textile enterprises are striving to maintain production so that workers have jobs and income. This aims to ensure that production can continue immediately once orders return, he explained.
“The export market is difficult, and the domestic market is also challenging, so the textile industry continues to face hardships. Nevertheless, it still maintains operations to ensure that workers have an income.”
Greater efforts needed
When the COVID-19 pandemic became complicated, many garment-textile enterprises had shown their flexibility and innovation.
They had proposed many solutions to create jobs for workers, such as investing in the production of fabric masks or prevention outfits.
However, in the post-COVID period, the strong decrease in consumer demand brought about tremendous pressure on the garment-textile and footwear industries.
Cao Huu Hieu, CEO of the Vietnam Textile and Garment Group (Vinatex), assessed that the Vietnamese apparel industry successfully reached its goal in 2022 with an export turnover of 44 billion USD, a year-on-year increase of 10%.
However, a series of negative signs from the fourth quarter of 2022, such as the global economic slowdown and high inflation, have indicated that the demand for textiles is likely to decrease in 2023, especially in Vietnam’s main import markets like the US and the EU.
Inflationary pressure in many countries around the world has affected the export of textiles, leather and footwear. (Photo: Duc Duy/Vietnam+) According to the Ministry of Industry and Trade, due to the decrease in overall demand from abroad, the number of orders for domestic businesses was affected in the first quarter of the year. Particularly, the top-value items such as garment-textile and footwear saw a two-digit decrease.
To remove bottlenecks and stimulate the economy, experts recommended businesses actively restructure and rearrange their management and production activities.
They should also seek to enhance competitive edge and contribute more significantly to the economy, experts suggested./.
