International flash: Vietnam's garment industry confident for 2023

Textile activity in Vietnam is gradually increasing as more and more export orders are pouring in. Garment producers are actively recruiting more workers, especially those skilled in fulfilling high quality garment orders.

 

According to the Vietnam Textile and Apparel Association (VITAS), Vietnam's textile exports are expected to reach $4.5-47 billion in 2023, based on the interest shown so far by Western buyers.

 

Vu Duc Giang, chairman of VITAS, said that most garment exporters expect the garment market to recover in the second and third quarters of this year, after which orders will start to rise again.

 

The VITAS chairman said Vietnam was a preferred sourcing destination with its advanced programmes in sustainability, green initiatives, circular economy and sustainable development. The brands he added are returning in large numbers. This trend has prompted several companies to resume production after the long Chinese New Year holiday.
 

 

In one example, 12,000 workers joined Garment 10 Corporation. The company has an export target of US$190 million this year. It intends to add another 800 workers to its production facilities. Meanwhile, the textile sector is working to reduce its dependence on imports and increase its use of domestic raw materials. vitas shows that the localisation rate for clothing and textiles has increased to 49%. Entrepreneurs are aiming to increase this to 55% by 2025.

 

 

The Saigon Economic Times reports that orders for garments are pouring in, but some manufacturers are afraid to take new orders due to a lack of capacity. The biggest difficulty facing Vietnamese garment companies is the shortage of labour and raw materials.

 

Many enterprises have seen an increase in export orders, and orders are gradually being filled. Analysts predict that Vietnam's textile and garment exports this year are likely to exceed the set target of US$42-43 billion.

 

According to Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (Vitas), Vietnam's textile and apparel exports reached nearly US$11 billion in the first four months of this year, an increase of nearly 21% year-on-year.

 

Among them, the main markets for Vietnamese textiles and garments such as the US, Europe and Japan have achieved considerable results.

 

It is worth noting that orders from exporters are quite stable. Nguyen Thi Xue Mui, Deputy Secretary General of the Vietnam Textiles and Garments Association, said that the situation of export orders from member enterprises is stable and shows good growth. At present, many enterprises have export orders scheduled until the end of the third quarter, but at present, they are facing difficulties in recruiting more workers to fulfil the additional orders.

 

 

The Central Institute for Economic Management (CIEM) under the Ministry of Planning and Investment has painted two scenarios for Vietnam's economy in 2023.

 

A seminar in Hanoi on January 12 heard that under the first plan, the country's GDP would grow by 6.47 per cent, inflation by 4.08 per cent, exports by 7.21 per cent and export and import revenues are expected to be US$5.64 billion.

 

These figures are set at 6.83%, 3.69%, 8.43% and US$8.15 billion in the second scenario.

 

Tran Thi Hong Minh, Director of the Asia Economic Forum, said Vietnam has been updating its assessments and recommendations over the last year to maintain macroeconomic stability, curb inflation and promote reforms and socio-economic recovery and development.

 

She noted that these efforts have paid off, with national GDP growth of 8.02 per cent in 2022, the highest level in the 2011-2022 period, exceeding the 6.5 per cent target set by the National Assembly, and inflation being contained at 3.15 per cent, lower than the previous forecast of 4 per cent.

 

Nguyen Anh Duong, director of CIEM's General Research Department, published a report on Vietnam's economy in 2022 and outlook for 2023, which said the economy would be more affected this year by, for example, tighter monetary policies in major economies to cope with inflationary pressures, growing geopolitical competition between large economies and the Russia-Ukraine conflict.

 

Dennis Quennet, lead advisor for the Macroeconomic Reform/Green Growth in Vietnam project run by the German Agency for Sustainable Development (GIZ), praised Vietnam for its impressive growth in 2022.

 

However, he noted that many of Vietnam's economic partners will face multiple difficulties and challenges in 2023 and recommended that Vietnam assess the quality of its growth and make appropriate adjustments in order to create momentum in 2023.

Source: Standard International Group (HK) Limited, Global Textile Information Network, Saigon Economic Times, Daily Economy, Textile Fabrics Platform