Vietnam's Q1 2023 textile-garment exports fall 18% YoY to over $7 bn

24 May '23

2 min read

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Insights

Vietnam's textile-garment exports fell by nearly 18 per cent YoY to more than $7 billion in Q1 2023.
Several textile firms are struggling with staff reduction resulting from falling revenues.
The industry is facing challenges due to a sharp drop in purchasing power in major markets and several firms are yet to receive orders for the rest of Q2.

Vietnamese textile and garment exports decreased by nearly 18 per cent year on year (YoY) to more than $7 billion in the first quarter (Q1) this year, according to general department of Vietnam customs statistics. Several textile firms are struggling with staff reduction resulting from falling revenues.

The April data continued to show not very positive signs, with an export value of $2.5 billion, down nearly 20 per cent over last year.

The industry is facing challenges due to a sharp decrease in purchasing power in major markets and several businesses have not received orders for the rest of the second quarter.

Inventories of major foreign retailers have increased since the second half of 2022. Both these problems are unlikely to be solved just in the second quarter, according to a Vietnamese news media report.

Reopening of China is another obstacle for garment companies as they have to compete with garment exporters there.

The Vietnam Cotton and Spinning Association (VCOSA) said the price of imported cotton is projected to fall, which will help improve the gross profit margin of yarn companies in the second quarter.

Most textile and garment companies have cautiously planned for this year with negative growth rates.

The Vietnam National Textile and Garment Group (Vinatex) said the industry would face several challenges from the Russia-Ukraine conflict, persistent inflation and falling global demand.

Therefore, it plans to reduce its profit before tax in 2023 by half over last year to only VNÐ610 billion ($26 million).

In the first quarter, the company posted declines in both consolidated net revenue and profit after tax, down 16.2 per cent and 255.3 per cent YoY respectively.

Fibre2Fashion News Desk (DS)

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