The textile industry faces many negative signs in the second quarter of 2023

DNHN - The weak global demand for textiles and apparel hurts production activities, thereby reducing the demand for yarn products. In recent years, Vietnam has become one of the world's largest exporters of textiles and apparel.

In recent years, Vietnam has become one of the world's largest exporters of textiles and apparel. This industry's output and export value has increased dramatically, contributing significantly to Vietnam's GDP. The textile and garment industry in Vietnam has attracted significant foreign investment. Companies from Japan, Korea, and Taiwan have constructed factories in Vietnam to take advantage of the country's inexpensive labor and manufacturing costs.

However, Vietnam's textile and garment industry is reliant on material imports from China, India, and Bangladesh. Changes in the global supply chain, such as alterations in trade policy or climate change, can have an impact on the availability of materials and the cost of production in this industry.

According to a report by the Office of the Board of Directors of the Vietnam National Textile and Garment Group (Vinatex), Vietnam's textile and garment exports decreased by 20.6% in April 2023 compared to the same month the previous year, with an export turnover of USD 3.06 billion (compared to $USD 3.86 billionin April 2022).

In the first four months of 2023, the nation's exports of textiles and apparel totaled approximately 11.7 billion USD, down 20% from the same period the previous year (absolute value decreased by nearly 3 billion USD).

Regarding the textile and garment export market in April 2023, statistics indicate that all the major export markets decreased compared to the same period the previous year, with the US market decreasing by 30% and the export turnover reaching 1.15 billion USD, the European Union (EU) market decreasing by 9.7% to 349 million USD, the Korean market decreasing by 21% to 234 million USD, and Japan decreasing by 3%.

In the first four months of 2023, only the Japanese market increased by 6.6%, whereas the US and China markets decreased by over 30% compared to the same period the previous year, and the EU market decreased by 12%.

In addition to weaker exports, there are indications of trouble when the IIP in the first four months of 2023 did not generally record growth. In the third quarter of 2021, the employment indices of the Textile and Garment industries fell at a comparable rate.

China's textile and garment manufacturing activity remained negative at the start of 2023, even though the negative effects of the COVID-19 epidemic were nearly over. In March 2023, the Textile and Apparel industries' output decreased by 3.1% and 7.7%, respectively.

The weakening global demand for textiles and apparel hurts production activities, resulting in a decline in demand for yarn products. By the end of April, cotton prices had fallen to around $80 per pound (down 46% year-over-year), which is in line with the average for the period 2012-2019, indicating a decline in the industry's demand for input materials.

During the first quarter of 2023, the majority of garment companies generated unsatisfactory financial results. According to financial statement data, only two of the twenty textile and apparel companies on the floor that have announced business results for the first quarter of 2023 have positive profit growth, while thirteen have positive profit growth. negative profit growth, with five companies even reporting losses.

P.V (t/h)