The decline in world economic growth has led to tight monetary policies, negatively affecting the activities of manufacturing enterprises. In addition, the damage caused by the Covid-19 pandemic has significantly affected the operation of the domestic textile and garment industry. At the end of the first quarter of 2023, the situation was not very positive in general, when the main import markets of Vietnam were also struggling with policies to stabilize the macroeconomy.

From the actual operation of businesses, Mr. Than Duc Viet, General Director of Garment 10 Corporation said from the beginning of the year, enterprises were relatively affected by the decrease in consumer demand. The conflict between Russia and Ukraine pushed up global energy prices and inflation, causing businesses to reduce export orders. In reality, US banks were forced to go bankrupt at an unexpected time. This event seemed unrelated to Vietnam but had a very profound effect on businesses. According to preliminary statistics of the Vietnam Textile and Apparel Association (Vitas) show that Vietnam's total textile and garment export turnover in the first three months of 2023 is estimated at US$8.701 billion, down 18.63% over the same period. In March 2023 alone, Vietnam's total textile and garment export turnover was estimated at 3.298 billion USD, up 18.11% over the previous month and down 12.91% over the same period. Total textile material import turnover totaled US$5.087 billion in the first quarter of 2023, a 17.97% decrease from the same period in 2022.

A representative of Vitas said that in the second quarter of this year, textile and garment enterprises still face many difficulties due to a sharp decrease in purchasing power from significant markets such as the US and EU. Currently, many businesses still have not had orders in April, so it is expected that from July to August, the new market is likely to change.

Read more: Vietnam sees decline in textile orders » Breaking News, Latest World News Updates - VietReader Viet Nam

Representatives of many textile enterprises announced that the demand for yarn products has improved but not significantly. The amount of inventory at almost enterprise has increased, even up to 1 month of production. For garment enterprises, the production situation is equally bleak, many orders are stopped, or if any are just small orders, the unit price is 20%-50% lower than in 2022. It has caused many garment enterprises to change their product structure, forced to make non-mainstream items to maintain production activities.

According to the General Director of Vietnam National Textile and Garment Group (Vinatex) Cao Huu Hieu, in the second quarter of 2023, the situation is still not very positive for the world economy in general and the textile industry in particular. The global economic recession and tight monetary policy are causing demand to decline in primary textile and garment importing countries of Vietnam as the US, EU, Korea, and Japan... Besides, China's opening reopening after a long time their businesses had to close because of the Covid-19 epidemic will also bring competition challenges.

“Vietnam's textile and garment industry continues to face difficulties in the context of high input costs, difficult lending activities, high lending interest rates for businesses, and disbursement capital congestion. Therefore, the textile and garment industry and other manufacturing industries are not able to achieve efficiency", said Mr. Cao Huu Hieu.

Facing the generally persnickety situation of the textile and garment industry, many enterprises are focusing on market work, repositioning their customers, and repositioning products, towards the domestic market to overcome difficulties.

Read more: Vietnam targets textile-garment export growth » Breaking News, Latest World News Updates - VietReader Viet Nam

Mr. Than Duc Viet said the repositioning is not used for new businesses because they had a strategic vision from being established. But for May 10, despite having a position in the export market and domestic consumers, it is time for it to reassess. May 10 is concentrating on product positioning, market, technology management, and production model to follow the right direction.

“May 10 has to restructure and reposition businesses with the execution of a digital transformation, using renewable energy and green materials to meet standards and develop. Enterprises have two big markets, export and domestic, so this occasion is also the time for enterprises to reposition the domestic market. Like the export market, enterprises will focus on new and potential markets such as South Africa, Africa, the Middle East, China... besides the traditional market." Mr. Viet said.


Vinatex General Director Cao Huu Hieu acknowledged that an unprecedented difficulty for the industry is ongoing. However, businesses in the Vinatex system are still trying to be proactive and flexible, adapting to the uncertain market context to stabilize finance, maintain the production apparatus, and most importantly, ensure jobs and life for all officers and employees.

Parallel with that, enterprises in the industry are concentrating on optimizing production activities, improving productivity, and product quality, and paying close attention to customers and the market to have flexible and timely policies suitable for going through difficult times.