Industrial enterprises need more "support" to accelerate in the last 3 months of the year

Pressure still weighs on manufacturing businesses

According to S&P Global, the Vietnam Manufacturing Purchasing Managers' Index (PMI) fell from 52.4 to 47.3 points in September, indicating that the health of the manufacturing sector has weakened to the most significant level since November 2023. Output, new orders, purchasing activity and input inventories all fell.

There are still many difficulties facing industrial enterprises, and more effective "support" solutions are needed. Photo: Can Dung

The report on production and business trends in the processing industry in the third quarter of 2024 and the forecast for the fourth quarter of 2024 by the General Statistics Office shows that the biggest difficulty for businesses is finding and expanding output markets for their products. Specifically, in the last quarter, 53% of businesses faced difficulties due to low domestic market demand; 50.6% of businesses faced difficulties due to increasing competition from domestic goods and 31.6% of businesses faced difficulties due to the fact that demand for goods in international markets has not yet fully recovered.

In addition, assessing the input factors for production and business, capital flow is still the biggest bottleneck for enterprises with 27.5% of enterprises facing financial difficulties; 21.7% of enterprises facing difficulties due to high loan interest rates. To reduce the pressure of increasing input costs in the coming time, 43.4% of enterprises recommended that the State continue to reduce loan interest rates so that enterprises have capital for production and business.

For example, at Vietnam Textile and Garment Group (Vinatex), in the first 9 months of 2024, the Group's consolidated revenue is estimated at VND 13,036 billion, equal to 100.7% over the same period in 2023 and reaching 72.8% of the plan. Pre-tax profit is estimated at VND 490 billion, equal to 170.1% over the same period in 2023, reaching 89.1% of the plan.

However, businesses are still under a lot of pressure as the market has not improved significantly. In the garment industry, there is pressure on delivery time, unit prices have not improved, and product quality requirements are more stringent. In the yarn industry, although losses have been reduced by 80-85% compared to 2023, businesses still face many difficulties and disadvantages due to the fluctuation of cotton prices and no improvement in yarn selling prices...

In addition to the problems of fiber enterprises, the textile and garment industry in general still faces many pressures even though it is about to enter the year-end consumption season. These include difficulties in accessing capital to maintain production and expand business activities. Enterprises are in dire need of policies to reduce interest rates for medium-term loans and support in accessing preferential loans, pressure on delivery time, unit prices have not improved, product quality requirements are more stringent, and consumption has not improved much.

Or the steel industry will find it difficult to achieve high growth as expected this year due to the large amount of inventory. Especially the oversupply of many domestic steel products along with the increase in imported steel from abroad is making the price competition of domestic finished steel products fierce. Not only that, this industry also faces many trade defense lawsuits and unfair competition cases. All of these make it difficult for steel enterprises to escape.

More effective "replenishing" solutions are needed

Mr. Pham Tuan Anh - Deputy Director of the Department of Industry, Ministry of Industry and Trade shared that in the context of the domestic economy facing many difficulties, poor market demand, private consumption has not yet played a role in promoting demand for production, along with efforts to remove difficulties for the real estate market, the Government's direction to promote disbursement of public investment capital, speed up the completion of large public investment projects is extremely important in creating new momentum for industrial production.

“ The government has also had to implement many synchronous solutions to support businesses in the recent past so that industrial enterprises can maintain normal production activities in the context of the domestic economy still facing many challenges, ” said Mr. Pham Tuan Anh.

The Ministry of Industry and Trade has focused on measures to stabilize the macro economy, control inflation, maintain growth, ensure major balances of the economy, and promptly update the new inflation growth scenario. Closely, effectively and harmoniously coordinate macroeconomic management policies to maintain economic growth in the new context. Closely monitor price developments of essential goods, especially some goods that tend to increase in price in the post-storm period such as food, materials and supplies for home repair, production and business establishments.

In addition, continue to remove difficulties for businesses and production facilities to promote production and boost exports. Promote the use of existing export orders and export opportunities to markets around the world, especially food and consumer goods. Make the most of traditional markets and continue to open new markets as proposed by the Ministry of Industry and Trade.

Continue to effectively promote the implementation of working programs with localities and existing business support programs to restore and promote industrial growth in localities and key economic regions.

With such pressure still weighing heavily, in order to help brighten the "picture" of businesses in the upcoming year-end consumption season, more effective "support" solutions are urgently needed. In particular, it is necessary to continue to have measures to stimulate demand, increase trade promotion, find new markets, new partners, support businesses to participate deeply in the production chain, remove bottlenecks so that businesses can access loans more easily with low interest rates.

On October 7, Prime Minister Pham Minh Chinh signed Official Dispatch No. 103/CD-TTg on supporting businesses to overcome difficulties and promote production and business activities in late 2024 and the following years.

In the telegram, the Prime Minister requested ministers, heads of ministerial-level agencies, government agencies; Chairmen of People's Committees of provinces and centrally-run cities to focus on directing agencies, units, and subordinate levels to continue to make efforts and resolutely implement solutions and tasks within their authority to support businesses in removing difficulties and obstacles, and promoting production and business activities in the coming months and years.

The Prime Minister assigned the Ministry of Industry and Trade to strengthen trade promotion support to diversify production, diversify supply chain markets, etc., to encourage businesses to export products to foreign markets. Research and organize fairs and consumer festivals to stimulate consumption and other forms to increase purchasing power of the domestic market, etc.

Source: https://congthuong.vn/doanh-nghiep-cong-nghiep-can-them-tro-luc-de-but-toc-3-thang-cuoi-nam-351573.html