Exports decelerate: Facts are no longer forecasts

Since the beginning of July 2022, many forecasts are not optimistic about export orders in the last months of the year due to large markets such as the US, EU, Japan...

To date, this worry is no longer a forecast. The data of the General Statistics Office shows that the export turnover of goods in September 2022 is estimated at 29.94 billion USD, down 14.3% compared to the previous month.

Reality already exists

In the first months of the year, furniture businesses operated relatively stably; But since the beginning of July, export orders have gradually decreased until now.

Regarding the cause, according to Mr. Nguyen Chanh Phuong - Vice President and General Secretary of the Ho Chi Minh City Handicraft & Woodworking Association (HAWA), this decline is mainly due to the price of raw materials for production and increased transportation costs. strong; while countries tighten credit policies due to rising inflation, leading to a sharp decrease in consumer demand...

“Due to high inflation, consumers in the United States and the European Union (EU) - two major markets of Vietnam - are focusing their spending needs on food, foodstuffs and other household appliances. Therefore, wooden furniture is not considered an essential item, so many people cut back on buying at this time. Besides, the high freight rates, together with the high purchase price of raw wood, increase the production cost, making it more difficult for the furniture manufacturing enterprises in our country", Mr. Phuong explained.

Similarly, leather and footwear businesses soon left the joy of growth in the first months of the year when the market in the third quarter and the fourth quarter of 2022 suddenly deteriorated; Along with that, input prices increased and profits narrowed.

Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, said that currently, member businesses are facing many difficulties, the inventory ratio is up to about 40%, the New orders from August 2022 to the first quarter of 2023 are also less.

"The EU and the US are the main export markets of Vietnamese leather and footwear, which are on a downward trend in terms of consumer demand, which will certainly affect purchasing power in the last months of the year," said Ms. Xuan.

Signs of export deceleration have also been gradually revealed in the textile and garment industry. According to Mr. Truong Van Cam - Vice Chairman of Vietnam Textile and Apparel Association, after 9 months, the industry's export turnover still achieved an impressive figure of about 35 billion USD, up 21% over the same period last year; However, if in the first 9 months of the year, the average export value per month is 3.8 to 3.9 billion USD, it is expected that the last 3 months of the year will only export 3.1 to 3.2 billion USD.

“From now until the end of the year, the textile and garment industry will face many difficulties, especially orders tend to decrease and unit prices decrease. The reason is that a large textile and garment market such as the US and Europe has experienced a decline in economic growth, which is not as expected, with an expected increase of only 50% compared to 2021.

Along with that, the inflation of these countries has never been approximately 10%, even in some months above 10%. Therefore, currently, the inventory ratio in the regions is relatively high, so the demand for orders from now until the end of the year and the beginning of 2023 is likely to decrease. This is a big difficulty for the textile industry from now until the end of the year," Mr. Cam informed.

The latest preliminary statistics of the General Department of Customs show that many export items that increased sharply in the first 8 months of 2022 suddenly decreased rapidly.

Specifically, the total import and export value of Vietnam's goods in the first period of September 1, 2022 (from September 1 to September 15) reached USD 26.34 billion, down 25.7% (corresponding to a decrease of 9 USD). .09 billion USD) compared to the results in the second half of August 2022. Some commodity groups with export value decreased, including: computers, electronic products and components, down 1.17 billion USD (equivalent to 38.2%); phones and components decreased by 1.07 billion USD (equivalent to 31.5%); textiles and garments decreased by USD 980 million (equivalent to a decrease of 44.8%); machinery, equipment, tools and spare parts decreased by 751 million USD (equivalent to 29.7% decrease)...

In the face of difficulties, it can be prolonged

Commenting on the deceleration of exports, Mr. Nguyen Minh Phong - economist said that the world economy in 2022 will have many fluctuations. At the beginning of the year, international organizations forecast that the world economic growth would recover and achieve a good growth rate thanks to the control of the COVID-19 epidemic; However, the Russia-Ukraine conflict pushed up prices of raw materials, fuel, logistics, supply chain disruptions, and high inflation in many economies... also caused these organizations to simultaneously lower their forecasts for world economic growth. world and countries after each update.

Although growth has not been slowed down, Vietnam's economy is facing many difficulties. Along with difficulties from the outside, difficulties related to the endurance of enterprises, capital sources, interest rates and especially the lack of new orders… can cause export growth in particular and economic growth of the country. Vietnam in general in the fourth quarter can hardly be higher than the third quarter as an annual rule.

“There are many signs that many industries and sectors such as textiles and garments, leather and footwear, wooden furniture and some aquatic products… are facing difficulties in new contracts. Therefore, from now to the end of the year, businesses need to have more drastic, timely management updates and follow the market to keep this growth rate. If in the fourth quarter, growth continues to be higher than the previous quarter, it is very positive, but the warning is not redundant in the context that the world economy has many unpredictable fluctuations," Phong noted.

To offset orders, Mr. Truong Van Cam said, textile enterprises have made great efforts and adapted very quickly to the challenges of the market. Accordingly, exports not only depend on the 5 traditional markets as before, the US, Europe, Japan, Korea and China, but also start shifting to Russia and some other countries.

Mr. Cam estimated: "I believe that in the coming time, textile and garment enterprises will still be able to adapt, although this fourth quarter will be difficult, even difficulties may last until the first quarter of 2023."

According to a representative of the Vietnam Leather, Footwear and Handbag Association, to overcome difficulties, businesses themselves also need to diversify from supply to export markets, not focusing on a few markets. The association will step up support for businesses to access more markets and be able to import raw materials from other markets when facing difficulties due to the impacts of the world situation.

In addition to the efforts of businesses, Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi Minh City Fine Arts and Woodworking Association also said that businesses are in need of support from the Government and the State Bank. has a policy of extending debt, reducing interest rates, extending loans, reducing container costs, and designing support packages. Businesses also hope, when the world's major merchants settle large inventories and will place orders again.

“When the market recovers, corporate finances have not yet recovered. The financial activities of the business will be put into bad debt, the chance of regaining the market is not there. Therefore, besides each business needing to have its own financial reserves, it is very necessary for the support of policies from the State and banks to do business together when there is a chance from a good recovery, "Mr. offer.

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