Order reduction by 70-80% causes more than 1,300 bankruptcy and business closures in Vietnam

In 2022, Vietnam was still one of the hotspots in global economic development, with a GDP growth rate of 8.02%. However, in the first quarter of 2023, Vietnam's economy has stepped on a sudden brake. The latest data shows that in the first quarter of 2023, the total import and export volume of Vietnam's goods reached approximately US$154.27 billion, a year-on-year decrease of 13.3%, of which exports decreased by 11.9% year-on-year.

In the first quarter, Vietnam’s textile and footwear orders fell by 70% to 80%. According to the Vietnam Textile and Apparel Association, in March 2023, Vietnam's textile and apparel exports reached approximately US$3.298 billion, a month-on-month increase of 18.11% and a year-on-year decrease of 12.91%. In the first quarter of 2023, Vietnam's textile and apparel exports reached US$8.701 billion, a year-on-year decrease of 18.63%, which was mainly caused by a decrease in the number of orders.

The manufacturing data was also not optimistic. On April 3, the Vietnam Manufacturing Purchasing Managers Index (PMI) released by S&P Global in March was 47.7, lower than the 51.2 in February, and it was the fourth time of below 50 in the past five months.

According to the report of the Vietnam Textile and Apparel Association, Vietnam's textile export orders in the first quarter of 2023 fell by 25-27% year-on-year. In response to the decline in orders, many Vietnamese textile and garment enterprises have reduced their operating rates, causing a large number of workers to lose their jobs. The industry expects this downward trend to continue at least until the third quarter of 2023. Even so, the Vietnam Textile and Garment Association still set an export target of US$46 billion in 2023, only if there is recovery of the economy and consumption in major export markets.