According to Cao Huu Hieu, Director of Vietnam Textile and Garment Group (Vinatex), 2023 has been the most challenging year for textile and apparel exports in the past 29 years.
Hieu was addressing a press conference and summarising the developments in the Vietnamese textile and garment export industry in 2023.
“The industry has gone through unprecedented difficulties due to geopolitical instability and rising inflation, which led to a decline in global textile and clothing demand in 2023,” he said.
Demand from our main export markets like the US and EU plunged in 2023 as consumers in the region tightened spending on non-essential goods like textiles and apparel.
“The export turnover of the global textile and garment sector fell by nearly 10 percent in 2023,” Hieu stated.
Due to the dip in demand, apparel order prices also plunged on average by around 30 percent and, in the case of large items, by a significant 50 percent.
The Vinatex Director further said that countries focus on price competition to get orders, while factors like minimum wages and exchange rates also carry weightage among competing countries.
Presently, the monthly wages of workers of the Vietnamese textile and clothing sector is US $330 per month and in second spot behind China at $420 per month,
It is three times higher than Bangladesh, two times higher than India, and 1.8 times higher than Cambodia.
While the Vietnamese Dong exchange rate was stable during the first eight months of the year, the Chinese Yuan depreciated 5 percent, Bangladeshi Taka dropped 5.9 percent, and Turkish Lira fell 31 percent.
He said that Vietnamese textiles and clothing exports became uncompetitive due to lower labor costs and the depreciating currency of competing countries.