Businesses "eat" orders
Recently, except for some fields such as: Milk, food processing, animal feed production, ceramic tiles,... enterprises have exploited the domestic market well so they have maintained good performance; some new investment projects in WHA Industrial Park, VSIP, May Matsouka Thanh Chuong have gone into production so they have maintained growth compared to the same period, but in general, enterprises have encountered many difficulties. Typically, garment, fiber production, wood production of all kinds, electronic components,...
For the textile industry, there has never been a time when production has been as gloomy as it is now, with orders falling severely. At Sangwoo Co., Ltd., a 100% Korean-owned company, Ms. Bui Thi Ngoc - Head of the Human Resources Department said: Production is extremely difficult now, with revenue and output down 70% since the beginning of the year. We are struggling, having to borrow from the bank to pay salaries for 1,300 workers.
In Nam Dan, Mr. Le Thanh Tinh - General Manager, Havina Kim Lien Textile Company - Nam Dan said: From the end of last year until now, the production situation has been very difficult; due to the global economic crisis, countries tightened spending, lack of orders, so output has decreased sharply. If at the peak period there were 3,000 workers who could not finish the work and had to work overtime, now there are only 2,500 workers working 8 hours a day, no overtime, and off on Saturdays and Sundays. With no orders, we have to arrange to make orders for December to both maintain jobs for workers and wait for work, wait for the situation...
According to the report, although the Covid-19 epidemic has been controlled, the world and domestic economies have fluctuated a lot. Prices of raw materials and transportation services have increased; the raw material market and product consumption have been severely affected, especially the markets in Europe, America and China.
In the Southeast Economic Zone, many businesses have no orders, have to adjust production scale, operate at a low level or have to temporarily suspend operations due to supply chain disruptions, etc. These difficulties have led to a decrease in the first 6 months of the year's targets. Revenue only reached 45.44% of the 2023 plan (down 10.32% over the same period); budget contributions only reached 47.88% of the 2023 plan.
According to the Department of Industry and Trade, scarcity of input materials, increasing raw material prices, and narrowing consumer markets have caused many difficulties and challenges for industrial production.
In the first 7 months of 2023, the industrial production index increased slightly by 2.63% over the same period. Except for some businesses that made efforts to return to production, the scale of some factories was expanded, new investment projects came into operation, and demand for some products increased; in general, businesses and factories faced difficulties and challenges due to the impact of the world and domestic situation, export orders decreased, raw materials were scarce...
Along with that, the production cost increased, so the products produced decreased such as: Wood shavings and chips estimated at 84.7 thousand tons, down 36.05%; Fiber estimated at 5.2 thousand tons, down 33.37%; Paper packaging estimated at 26.0 million units, down 29.72%; Headphones connected to microphones estimated at 17.3 million units, down 27.75%; BSE speakers estimated at 39.7 million units, down 22.12%; Cartons estimated at 11.7 million units, down 12.53%; Canned beer estimated at 50.6 million liters, down 10.54%; Electricity production estimated at 1,733 million kWh, down 8.76%.
Removing difficulties for businesses
The unpredictable developments of the world economy have negatively impacted people's lives and production and business activities. Consumer demand has decreased; the global supply chain continues to face the risk of disruption and breakage, causing difficulties for import, export and economic growth, which is one of the main reasons for the decrease in the number of newly established enterprises and the increase in the number of dissolved and suspended enterprises compared to the same period.
According to data from the Nghe An Statistics Office, in the first 7 months of the year (as of July 20, 2023), Nghe An province had 1,177 newly established enterprises, down 3.45% over the same period in 2022, with a total registered capital of VND 9,047.5 billion, down 30.36% (down VND 3,944.2 billion). The number of newly established branches, representative offices, and business locations was 488 units, down 13.93%.
There were 642 enterprises resuming operations, an increase of 7.36%. The number of branches, representative offices, and business locations resuming operations was 77 units, an increase of 5.48%. The number of enterprises registering to temporarily suspend operations was 1,050, an increase of 14.75%; The number of branches, representative offices, and business locations registering to temporarily suspend operations was 120 units, an increase of 10.09%; The number of dissolved enterprises was 140, an increase of 62.79%; The number of branches, representative offices, and business locations that were dissolved was 189 units, an increase of 89% (+89 units); The number of enterprises announcing dissolution was 170, an increase of 2.9 times (+126 enterprises).
Mr. Dinh Van Phong - Head of Enterprise and Labor Department, Southeast Economic Zone Management Board said: After the Covid-19 pandemic, industrial production enterprises have faced many difficulties in the general context of the world economy, so in the first 6 months of 2023, many enterprises had no production and business activities, had to operate at a low level or temporarily stop operations, workers had to temporarily quit their jobs, and wages and incomes of workers were cut. The labor situation has fluctuated strongly in recent times, many workers quit their jobs due to lack of orders, staff cuts, so workers changed jobs.
Statistics show that in the first 6 months of 2023, the number of employees increased by 7,660 people, the number of employees decreased by 6,570 people, businesses mainly recruited to compensate for workers who had quit. The number of employees increased mainly from newly established businesses.
The global and domestic economic situation and the "health" of the business community are challenges for this year's growth target. Currently, the Government has proactively implemented many groups of solutions, including reducing lending interest rates, promoting disbursement of public investment capital, reducing VAT... However, some experts assess that many policies to support businesses with financial measures have been introduced but there are still delays in implementation, making the effectiveness unclear. Reducing VAT by 2% can help boost domestic consumption but the impact is not much, more solutions are still needed. The State Bank has cut operating interest rates to help boost economic growth but needs to diversify products and services, simplify lending procedures to create conditions for businesses to access support loans....
In addition, it is necessary to analyze, evaluate and forecast global economic situations and developments as a basis for preparing appropriate action plans.
According to the Nghe An Statistics Office, the labor utilization index of industrial enterprises in the first 7 months of 2023 was 91.56% compared to the same period last year. By economic type, the labor force in the state sector decreased by 16.11%; the non-state enterprise sector decreased by 0.16% and the foreign-invested enterprise sector decreased by 13.27%.
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