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Mr. Pham Xuan Hong, Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association, assessed that the textile market has warmed up and gradually stabilized in the last months of the year. More specifically, although there is still a shortage of orders, businesses still ensure jobs for workers in the fourth quarter, the decline in revenue and difficulties have also lessened.
This result is due to the recent prolonged decline in the textile industry. When consumer demand for textile products recovers, markets also have new demand.
“ Although the market is still difficult in terms of price, competition in small orders, and designs are more difficult and complicated, businesses are trying very hard to meet the requirements, thus promoting consumption and signing contracts with partners, ” said Mr. Pham Xuan Hong.
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| The textile market is warming up. Photo: Can Dung |
Regarding the increasingly high standards of American and European importers, the Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association said that Vietnamese enterprises mostly meet the requirements (except for regulations related to recycling, which are not really clear), and in terms of emissions and environment, they can completely meet them.
Data from the Vietnam Textile and Apparel Association shows that in August 2023, textile and garment exports reached nearly 3.6 billion USD, down 6% compared to July.
In the first 8 months of the year, textile and garment export turnover reached 26.1 billion USD, down 16% over the same period in 2022. With this result, the textile and garment industry has completed 65% of the target of reaching 40 billion USD in export turnover in 2023.
Similar to the analysis of the Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association, information provided by market research units also shows that the textile market is likely to warm up towards the end of the year.
In the latest analysis report on the textile industry, SSI Research Securities said that orders for Vietnam's textile industry are expected to gradually improve from the fourth quarter of 2023.
SSI Research forecasts that the selling price of exported garments will continue to remain low, about 20% lower than the average in the first half of 2022, and only slightly improve for FOB orders.
Therefore, manufacturing enterprises' profit margins will continue to narrow despite gradual improvement in input material costs; gross profit margins will find it difficult to return to their peak in 2019.
In particular, SSI Research experts believe that the trend of orders with smaller volumes and faster delivery times (previous delivery times were up to 2 months and can now be shortened to 3-4 weeks) will last until 2024.
In line with the above market signals, some domestic textile and garment enterprises are gradually stabilizing production. TNG Investment and Trading Joint Stock Company is one of the enterprises that achieved positive business results in August 2023 when it reached 721 billion VND, an increase of 3% compared to August 2022.
To achieve this result, the company has created connections and exploited new customers, oriented product line strategy, and attracted customers directly. In addition, the company accepts orders with low profit margins to maintain output.
At the macro level, the August 2023 macro report of Bao Viet Securities (BVSC) stated that it is likely that in the third quarter of 2023, the industrial production index will record positive growth compared to the same period and can pull the average growth in the first 3 quarters back to positive growth. Specifically, with an increase of about 3.5% compared to the same period, the industrial sector can contribute about 1 percentage point to GDP growth in the third quarter.
Notably, BVSC confirmed that the industrial production index of the textile, fiber, metal, iron and steel, and bed, wardrobe, table and chair industries has increased strongly again compared to the same period last year. The industrial production index of the wood and garment industries has returned to positive growth in August.
Thus, it can be seen that the textile market seems to be warming up. The efforts of enterprises in finding orders and meeting increasingly difficult regulatory standards, combined with the support of the Ministry of Industry and Trade in promoting market expansion, hopefully, the Vietnamese textile industry will soon "get out of the bottom" and gradually recover production and export.
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