Hot premises closed
In early June, a series of premises on central streets of Ho Chi Minh City such as Ly Tu Trong, Le Thanh Ton, Le Loi, Dong Khoi... still had signs for rent. Most of these premises had been closed since the end of last year and had not yet found tenants. The most noticeable was the frontage of Le Loi Street (District 1), next to Ben Thanh Market, stretching to Pasteur intersection, with no buyers or sellers. The city center has been open again since the end of April when the metro line bunkers were officially removed, but there are still no tenants. Similarly, some premises on Dong Khoi Street, which is known as the most expensive street in the city, are also closed.
According to the writer's survey, the number of closed premises with for-rent signs appeared more than in February - the time after Lunar New Year 2023. Right at the intersection of Nguyen Hue - Ngo Duc Ke, where a very popular Japanese restaurant used to be located, now the facade is covered with advertisements for houses for rent. Next to that, a number of townhouses also have for-rent signs, creating a deserted area. Or near the Notre Dame Cathedral area, McDonald's and Saigon La Poste - Café Lounge have stopped operating and the premises have no new tenants, and around the Turtle Lake area on Pham Ngoc Thach Street has also become deserted when many cafes cannot survive.
Many premises on central streets of Ho Chi Minh City remain closed.
Nguyen Trai Fashion Street, stretching from District 1 to District 5, also has many stores that have stopped operating. Unlike the bustling scene of choosing clothes before, many stores now have only 1-2 customers browsing or only have sellers. Moving to Nguyen Dinh Chieu Street, the number of closed stores is interspersed with sales points... Not only fashion stores but also restaurants, cafes, many locations that are companies and offices have also followed this trend. Many places may have just stopped operating so the old signs have not been removed yet.
According to the general explanation, purchasing power in most industries is at a low level. Meanwhile, the cost of renting premises in the city center is quite expensive, making it impossible for many businesses to bear. A seller at a fashion store on Nguyen Trai Street shared that the rental price of a townhouse is still around 100 million VND/month. After the Covid-19 pandemic, the rental price has decreased but not much while purchasing power is decreasing. As for large premises, right at the intersection of "hotter" streets such as Ly Tu Trong, Nguyen Hue... the rental price is up to about 500 million VND/month. If you add the cost of employees, management... while customers are sparse, it is difficult to do business profitably.
Prime location premises closed for months
The situation is not "warmer" yet
Ms. Ngoc Hoa, the owner of a women's clothing manufacturing facility in Tan Phu District, complained that "sales have never been so slow." She said that her facility specializes in sewing women's fashion products for wholesale to a number of stalls in Tan Binh and An Dong markets. Previously, on average, her facility sold nearly a thousand products each month. However, since the Lunar New Year, sales have been slow. In the entire month of May, she even sold less than a hundred products. "Previously, on average, each stall would call to pick up a few hundred items at a time. Now, they sometimes wait a whole month without hearing from anyone. After decades of doing this business, it's just now that it's so slow. I don't know when things will get better," Ms. Ngoc Hoa worried.
Bui Vien Western Street 'caught' in a wave of returning premises: Shop owners work 20 hours/day to survive
Even electronics and mobile phone businesses are struggling. The "giant" Mobile World announced that its revenue in the first 4 months of this year decreased by 23% compared to the same period last year. In particular, the Mobile World and Dien May Xanh chains alone saw a 30% decrease in revenue. The Bach Hoa Xanh food store chain recorded a 4% increase in revenue compared to the same period last year, but this unit has closed 20 stores. Previously, Mobile World's first quarter 2023 report announced that its revenue decreased by nearly 26% but its profit plummeted by 98.5% compared to the first quarter of 2022. Even food stores shared that purchasing power is still declining and there are no signs of recovery...
Dr. Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research at the University of Economics (Vietnam National University, Hanoi), said that according to his observations, not only in Ho Chi Minh City but also in the capital Hanoi, the number of closed premises or stores that are doing business closing early on weekends is also quite high. Spending and shopping are still sparse and there is no difference compared to the beginning of the year. While households tighten spending, businesses are also on the defensive. Surveys and discussions with many businesses show that inventories in all fields are at high levels as both export and domestic demand plummet. The purchasing managers index (PMI) of Vietnam and many countries continues to be low, below 50 points, showing that production has not yet recovered.
"Service consumption in the two locomotives of the country, Hanoi and Ho Chi Minh City, has not really had positive changes," Dr. Nguyen Quoc Viet emphasized. Therefore, he proposed that the Government needs to step up the implementation of many more drastic parallel policies, including monetary and fiscal policies, to support businesses and people because "one hand is not enough, two hands are needed". Especially now that inflation is no longer a threat to Vietnam, it is possible to strongly promote many activities to create confidence for businesses and people.
Furthermore, many policies have been introduced but have not been really effective due to weak implementation. For example, the public spending policy is still stuck somewhere, leaving nearly 1 million billion VND lying in the treasury without being able to enter the economy. Or the 2% interest rate support package for businesses; the lending policy to support the development of social housing and home buyers has not moved. The 2% value added tax reduction policy is still pending... It is necessary to pay attention to implementing many policies to immediately reduce all kinds of costs for businesses. From there, it will help improve the competitiveness of domestic goods, help businesses make profits, which means workers have income, and then can stimulate domestic consumption.
The S&P Global Manufacturing Purchasing Managers' Index (PMI) for Vietnam fell to 45.3 in May from 46.7 in April. This was the third consecutive monthly decline and the steepest decline since September 2021. Vietnam's manufacturing sector continued to contract in May as demand remained weak. Output and new orders fell further as firms cut jobs and purchasing activity, respectively. Meanwhile, business confidence continued to decline. With new orders continuing to fall, firms also cut production midway through the second quarter of the year. Output fell across all three manufacturing sectors, with the sharpest decline in intermediate goods. Some firms reduced staff numbers due to reduced workload. This, combined with some voluntary resignations, led to a further fall in employment in May, albeit at a smaller rate than in the previous survey. Stocks of finished goods also fell as firms adjusted production in line with falling new orders. This was the first fall in three months…
Source link
Comment (0)