Vietnam’s exports to major markets are showing signs of slowing growth, as many enterprises have been facing reduced orders, supply chain disruptions, and intense price competition.

According to a report from the Ministry of Industry and Trade sent to the prime minister, Vietnam’s export turnover reached US$190.7 billion in January-June, marking a nearly-15-percent increase. 

However, growth in key markets like China and Japan has been gradually declining.

Despite signs of global economic recovery, the pace remains slow and fraught with risks. 

Fluctuating prices of gasoline, raw materials, and freight rates are creating inflationary pressures and affecting global growth. 

Prolonged geopolitical tensions have resulted in risks of escalating disruptions to supply chains and further slowing economic growth.

At Hiep Phat Industrial Equipment Co. Ltd. in Ho Chi Minh City, the company has switched from operating three shifts to facing a decline in customer demand. 

Director Bui Thanh Luan noted the struggle to secure new orders, with a significant drop in order sizes from hundreds of millions of dollars to $10,000-20,000. 

The company has adapted by focusing 60-70 percent of its production on the domestic market.

“We’re accepting lower-profit domestic orders to sustain operations and jobs,” Luan said. 

Similarly, the textile and garment industry, a major export sector for Vietnam, is encountering difficulties. 

Nguyen Thi To Trang, general director of Vinatex Phu Hung Joint Stock Company in Thua Thien-Hue Province, central Vietnam, reported that while the yarn industry showed some recovery in January-August, challenges persist. 

Declining global consumer demand, political instability, and increased global yarn production capacity are creating intense competition. 

China’s expansion of domestic yarn production has also reduced imports from countries like Vietnam, India, and Pakistan. 

Nguyen Dang Loi, general director of Dong Xuan Knitting Company in Hanoi, noted that while the textile and garment market has shown signs of warming since late 2023, it has not fully recovered to pre-pandemic levels. 

Textile leaders stay hopeful, seek gov't support

Despite high production costs, labor recruitment challenges, and fierce price competition, Loi is optimistic.

With 90 percent of exports going to Japan, Loi anticipates that the devaluation of the Vietnamese dong and Japanese yen against the U.S. dollar may boost business efficiency.

He expects that instability in Bangladesh could redirect textile and garment orders to Vietnamese enterprises. 

Dong Xuan Company currently has orders through the end of the second quarter of 2025 and is negotiating new contracts.

Both Luan and Trang also remain hopeful about a recovery in the future.

“I expect a recovery in the third quarter of next year based on information from our partners,” Luan said.

Meanwhile, Trang is upbeat about a demand and price rebound in the final months of 2024, particularly during peak season.

Besides, both have called for government support to address current challenges.

Trang highlighted that electricity expenses constitute nearly one-third of the processing costs per kilogram of yarn. 

She urged the state to implement policies that mitigate the impact of rising input prices and enhance competitive advantages for businesses.

Luan, on the other hand, viewed the current difficulties as an opportunity to streamline small and fragmented businesses. 

He emphasized the need for government policies that aid business recovery and competitiveness. 

Specifically, Luan advocated for access to long-term capital with manageable interest rates to support investment and recovery.

“We borrow money but struggle to repay it within six months,” Luan explained. 

“This situation hampers our ability to invest effectively, as we are preoccupied with high-interest loan repayment. 

“The manufacturing industry, which creates jobs and produces material wealth for society, operates with low profit margins. 

“Without support, sustaining operations will be extremely hard.”

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