Vietnamese garment and textile makers have seen orders increase in the first half of 2024, however, prices remain low, according to tbe General Director of Vinatex, one of Vietnam’s biggest garment and textile manufacturers. Prices are around 20 percent lower than pre-COVID levels and can be up to 50 percent lower on some items.
Of note, last year was not a good year for garment manufacturers and clothing suppliers in Vietnam. This was mostly on the back of lower demand in key export markets as a result of higher inflation from higher fuel costs. The response to this has been mostly supply side stimulus. Tax and interest rate cuts have been common but the impact of these measures has been limited without the demand to support them.
By the end of November 2023 exports of garments and textiles from Vietnam were hovering at US$30.4 billion, a drop of 12.3 percent over the same period in 2022.
This decline also saw a reduction in the garment manufacturing workforce with a number of big layoffs around the country. In fact, in the first six months of 2023 an estimated 70,000 workers in the garment and textile industry were laid off.
Though local manufacturers and industry bodies are optimistic about 2024, the reality is that it is mostly external forces that have created the current downturn. Higher inflation on the back of higher oil prices has taken its toll on consumer spending in developed markets in the EU and US and until this is resolved, garment and manufacturing hubs like Vietnam will likely continue to struggle.
Vietnam’s garment and textile exports this year are sitting at US$13.2 billion as of the end of May, according to the latest Vietnam customs data.