Vietnam’s textile-garment export turnover reached its highest ever levels as it increased 23 per cent Y-o-Y to about $22 billion in the first six months of 2022 (H1’2022), says Vietnam Textile and Apparel Association (VITAS). The country’s textile and garment exports to the US increased 26 per cent Y-o-Y to $7.58 billion during the period. The future of Vietnam’s textile and garment industry is expected to be determined by the economic developments in the US markets, says a report by Viet Dragon Securities JSC (VDSC) based on data from Vietnam’s General Department of Customs;

However, in the second half of 2022, demand will decrease due to high consumption in 2021, predicts the VDSC report. Vinatex states, US market’s textile and garment import demand is likely to decline 7-10 per cent in Q2 of 2022. The US ban on cotton originating from the Xinjiang region may cause further disruptions in supply chain and contribute to higher cotton prices. The ban may affect the source of raw materials of Vietnamese enterprises and create barriers when exporting to the US market.

However, large textile and garment enterprises in Vietnam can benefit by replacing orders of Chinese companies in the US. The recent shutdown of China’s economy also led to a shift in orders from China to Vietnam. China’s market share in textile imports to the US fell to a record low of 26.3 per cent in volume and 16.8 per cent in value in April this year.

A recent report by SSI Research estimates, revenues of textile and garment manufacturing companies in Vietnam will decelerate in the last six months of 2022 and in 2023. Additionally, the costs of yarn, fabrics, logistics and labor are expected to increase due to rising oil prices and growing competition in the labor market, the report concludes.