Abundant orders, textile and garment enterprises worry about labor shortage

Mr. Pham Xuan Hong - Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association said that orders from textile and garment enterprises are recovering relatively well. In the second half of 2024, the industry's growth is expected to increase by 15% compared to the first half of the year.

Data from the Vietnam Textile and Apparel Association also shows that Vietnam's textile and garment exports in the first 8 months of 2024 are estimated to reach 28.32 billion USD, up 6.19% over the same period in 2023. Happily, July 2024 and August 2024 are two consecutive months in which Vietnam's textile and garment export turnover has reached over 4 billion USD, since August 2022.

It is forecasted that Vietnam’s textile and garment import and export will continue to be positive in the coming months, because according to cyclical factors, demand for goods often increases sharply in the last months of the year. Vietnam’s main export markets are warming up and have grown again, such as the US, South Korea, Japan, Canada, etc. However, the EU market’s growth rate is still low.

According to the Vietnam Textile and Apparel Association, in 2024, the textile and garment industry aims to achieve a total textile and garment export turnover of 44 billion USD, an increase of 9% compared to 2023. With an accumulated 8-month turnover of over 28 billion USD, on average from now until the end of 2024, each month needs to reach an average turnover of 4 billion USD. However, the second half of the year is also the peak for orders and production for Christmas and New Year, so with the growth momentum in 2 consecutive months, the industry's chances of reaching the finish line are relatively high.

Abundant orders, textile and garment enterprises worry about labor shortage. Photo: Bang Tam

According to many businesses, the textile and garment market has shown signs of warming up since the fourth quarter of 2023. Total textile and garment demand in 2024 is forecast to increase by 5-6% compared to 2023, although it is not equal to the period before the Covid-19 pandemic. Many businesses have orders until the end of 2024 and are negotiating orders for 2025.

The significant recovery of textile and garment export orders, according to some businesses in the industry, is due to the flow of orders shifting from Bangladesh to neighboring countries, including Vietnam. However, Mr. Pham Xuan Hong affirmed that the recovery of textile and garment orders is mainly due to the recovery of purchasing power in Vietnam's major export markets, pushing up orders. " The flow of orders shifting from Bangladesh is only temporary, " said the Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association.

The recovery in orders is a good sign, but it also makes textile and garment enterprises struggle to recruit more workers. In fact, the labor shortage is not only happening to textile and garment enterprises now. Thanks to the increase in orders, many enterprises have been recruiting since the beginning of the year.

For example, Song Ngoc Garment Company Limited (Binh Tan District) opened 4 more sewing lines, so it has to continuously recruit workers, but up to now it is still short of about 100 workers. Or Viet Hung Joint Stock Company (District 12, Ho Chi Minh City) has opened a production line, and needs to recruit about 180 more workers to start working immediately.

Recruiting workers is difficult even for large companies that pay high salaries and have good social benefits. According to a representative of Nha Be Garment Corporation, the company has done almost everything possible to attract workers, including going to job service centers, participating in recruitment fairs, posting jobs on reputable recruitment sites, etc., but to no avail.

It is forecasted that from October 2024 to February 2025, there will be a situation of "pushing" orders from partners, the company may have to recruit more seasonal workers to meet the production rhythm of orders.

Explaining the labor shortage of textile and garment enterprises, Mr. Pham Xuan Hong said that the end of the year is the production season not only for the textile and garment industry but also for many other industries, so there is a massive recruitment of labor, making recruitment, including seasonal labor recruitment, difficult.

In addition, due to the difficult orders in 2023 and the first half of 2024, businesses are forced to reduce working hours and reduce labor. Unemployed workers return to their hometowns, and at the same time, it is almost Lunar New Year, so workers do not intend to return to work immediately, so the shortage is even worse.

To solve the problem of labor shortage, which is always hot at the end of the year, according to experts in machinery and equipment investment, improving production capacity is essential. Enterprises also need to increase subsidy policies to retain workers.

On the business side, in order to take advantage of the market opportunity that is gradually warming up, manufacturers hope that credit institutions will not continue to cut credit limits and increase lending interest rates. Along with that, increasing input costs, such as increasing regional minimum wages and increasing electricity prices, will further increase pressure on businesses, while order prices do not increase or are even negotiated down. To support businesses to overcome this difficult period, the State needs to have policies to reduce pressure on increasing input prices in order to create better competitive advantages for businesses.

Source: https://congthuong.vn/doi-dao-don-hang-doanh-nghiep-det-may-lai-lo-thieu-lao-dong-346465.html