Fueled by a rebound in global demand and a surge of interest from new international players, Vietnam's textile industry is emerging as a reliable and competitive source for apparel brands worldwide.
Though export turnover of Vietnamese textiles and garments increased 16.4 per cent in the first eight months of this year, the Viet Dragon Securities Company has forecast that reduced demand and a prolonged inventory cycle will overshadow the prospects for new orders in 2023 or even have an effect from the fourth quarter of this year.
Attracting green projects into the production of raw materials, forming a supporting industry, and digitalizing the production process are keys to helping the textile industry develop sustainably in the new context. The industry also needs to selectively attract FDI, prioritizing projects with advanced technology that do not have any adverse impact on the environment.
On August 11, at a national conference between the Prime Minister and businesses, the Vietnam Textile and Apparel Association (VITAS) proposed that the government remove difficulties facing textile and garment enterprises by reducing or exempting certain taxes and fees, implementing the business recovery support package, and quickly approving the “Strategy to develop the textile and footwear industry to 2030 and vision to 2035”.
According to the General Statistics Office, in the first half of this year, about 1.2 million people were unemployed, or 2.4 per cent of the workforce. Meanwhile, textiles and footwear - two of the most labor-intensive industries in Vietnam - have been short of workers in recent years.
Market fluctuations and rising inflation around the world since the middle of the second quarter have slowed down textile and garment exports. Textile enterprises are also facing problems from a lack of raw materials, labor shortages, and rising costs from escalating gasoline prices. In the long term, the response of the garment industry is to prioritize measures to keep labor supply stable and flexibly change products.
Vietnam’s textiles and garment sector is a traditional outsourcing industry using a lot of labor and natural resources, making its transition to green production a major challenge. The Vietnam Textile and Apparel Association has set a target of reducing energy consumption by 15 per cent and water consumption by 20 per cent by 2023 and completing the “greening” of the sector by 2030.
Figures from the General Department of Vietnam Customs show that the US imports the most textile products from Vietnam and is also the largest market for Vietnam’s wood and wooden products. Textiles and wood are now among the groups with the largest number of stocks and attract the most attention from stock market investors.
