Recently, news that domestic manufacturing factories are short of orders has flooded the screens of major platforms.
Some time ago, factories in Vietnam, which had been unable to recruit workers and were full of orders, began to run out of orders. Many factories have also implemented measures such as reducing overtime hours, taking holidays, and laying off employees.
In the second half of the year, many factories are short of orders
On July 30, according to Vietnamese media vnexpress:
Screenshots from Vietnamese media reports
After six months of strong recovery in the first half of the year, many factories began to run out of orders in the second half of the year and had to shorten production times, stop recruitment, and reduce labor force.
The second half of the year is also a difficult period for textile, footwear and clothing workers and companies to reduce orders. Some factories have had to arrange for workers to be furloughed on a rotating basis.
Ms. Tran Thi Tuyet Mai, deputy secretary-general of the Vietnam Textile and Garment Association (Vitas), said that at the beginning of this year, companies received many orders but lacked workers. Many factories have to find places to outsource less.
In the second quarter, the Russia-Ukraine war broke out, oil prices rose, and the epidemic… had an impact on people’s global consumption habits. The purchasing power of fashion apparel products has dropped sharply, and inventory cannot be sold. The brand does not sign new orders. Some factories are running out of orders, forcing them to recalculate appropriate labor plans, such as giving workers Saturdays off.
Mr Nguyen Huu Tuan, human resources director of Tanh Cong Textile – Investment – Trade Joint Stock Company located in Tan Binh Industrial Park (Tan Phu District), said the factory is still operating normally, but orders will be lost by September to October.
According to the plan, the company will arrange for workers to take vacation at the same time. In conjunction with the National Day holiday, the factory will suspend production for 8 days. The company then arranges for workers to take Saturday off as appropriate to reduce overtime work. Workers’ incomes are expected to fall by 10-20%.
Mr. Duan, who has more than 30 years of experience in the textile industry, said that the second half of this year will be a good time to “purify” the industry. If financial companies are weak and have no orders, they will find it difficult to survive due to high costs, and they will have to reduce production or go bankrupt. There is a shortage of workers and unemployment is easily visible.
In Thanh Cong, businesses, employees and shareholders must share the difficulties and accept reduced profits. However, factories still maintain many supportive policies, allowing people to wait for recovery. At the beginning of July, the company raised wages by 6%, the price of gasoline was raised from 10,000 VND to 15,000 VND per day, and meal expenses were also increased by 12%…
When the peak season is slow, the factory has a lot of inventory but no customers.
Mr. Tran Viet Anh, Vice Chairman of the Ho Chi Minh City Business Association (HUBA), said that not only electronics, textiles, shoes and clothing, but also wood and steel production… are also facing many difficulties due to the purchasing power of key markets. Usually, starting in June, the sales season starts with Mid-Autumn Festival, the new school year, Christmas… But this year things are quite quiet.
“Many factories have a lot of inventory and have reduced prices, but there are no buyers,” Mr. Viet Anh said, adding that difficulties from the pandemic, world wars, inflation… are slowly seeping in. Many businesses have had to rearrange production activities and reduce working hours. The means of production in some industries have begun to cool down, and many powerful financial institutions will buy reserves and wait for recovery. The market for this group looks warm, but no new jobs are being created.
According to the person in charge of HUBA, judging from the scale of production, many companies are still short of workers and have stopped hiring. Currently, the factory is mainly reducing overtime and giving annual leave. However, the next work will not be enough for a full week of 8 hours a day. At the same time, workers are eager to work and work overtime to pay for post-pandemic expenses. Prices are rising. Children in the new school year…
“This situation creates problems for companies to retain staff,” said Mr. Viet Anh. When income decreases, workers will move to other jobs. Until the market recovers, factories will be left without workers and once again struggling to compete for human resources.
Vietnam’s textile and apparel industry worries about lack of orders
Vietnam’s “Youth Daily” reported on July 28 that on July 27, Pham Chung Cheng, executive president of Vietnam Textile and Garment Group (Vinatex), said at the opening ceremony of the “2022 Textile and Garment Industry Industry-Equipment and Raw Materials International Exhibition” that due to some The Vietnamese textile and apparel industry will face many difficulties in the first few months before the end of the year due to the decline in international market demand caused by national inflation, political instability and other reasons. At the same time, in addition to the sharp drop in cotton prices, the prices of other raw and auxiliary materials in the clothing industry continue to rise due to transportation factors. Some distributors are building large backlogs of goods and are faced with both overstocking and declining sales. Manufacturers also have to face the difficulty of rising raw material prices in the context of declining purchasing power.
Pham Xuan Hong, chairman of the Ho Chi Minh City Textile, Garment and Embroidery and Weaving Association, said that the textile and apparel industry is facing a downward trend due to tensions between Russia and Ukraine and rising inflation. Sales in the United States and Europe have been on a downward trend. Many customers have postponed orders and are likely to face many challenges.
The Vietnam Textile and Apparel Association stated that the goal proposed by the textile and apparel industry is: exports will reach 42-43 billion US dollars in 2022, and exports of 22 billion US dollars have been achieved in the first six months of this year.
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