Vietnam’s garment industry is expected to face a decline in orders from its key markets over the next two quarters.

High inflation is dampening global demand.High inflation in many of Vietnam’s key markets such as the United States, the EU and Japan have hurt demand, including the demand for Vietnam’s garment and textile products.

Vietnamese companies have had to cut production including cutting their workforce.The weakening of the currency has also added to the difficulties faced by some garment makers, as imports of their raw materials are more expensive. Vietnam's currency has lost eight per cent against the dollar so far this year.The exchange rate is expected to continue to drop in the second half of 2022, negatively affecting businesses, particularly those with high expenses calculated in dollars.

As of now Vietnamese enterprises are seeking ways to diversify material supply sources as well as export markets. However exports this year are still expected to reach the target. The industry’s exports in the first ten months of 2022 were up 16 per cent from a year earlier and accounted for 12 per cent of the country’s total exports.

Textiles and garments are the Southeast Asian country’s second largest export earner, after smartphones.