Textile and garment businesses in Vietnam are facing pressure. Purchasing power has been weakened by mounting inflation and other global uncertainties.

The country’s textile and garment exports to the US, Europe, Japan, the Republic of Korea and China fell by nearly 27 per cent in September 2022. The number of orders placed for the fourth quarter of 2022 fell by almost 50 per cent from the second quarter, when orders increased strongly. Unsold inventory in import markets is high at present.Many companies have received orders to be delivered in the first quarter of 2023, but the order number is still much below their capacity.

Enterprises whose buyers are mainly in the US and Europe have been hit harder compared to those exporting to Japan and Korea. Aside from inflation, fluctuations in material prices are also a problem.Enterprises are seeking ways to diversify material supply sources as well as export markets because when material sufficiency is ensured, they can boost shipments to many markets, thus helping guarantee production stability, supply chain, and sustainable exports.

Another challenge is foreign exchange rates. The euro has continually depreciated as a result of recession concerns due to Russia’s threat to reduce gas supplies for many European countries.