Vietnam’s Manufacturing Industry in Depression

With the shrinking of Vietnam’s exports and the slowdown of economic growth, Vietnam’s trade deficit is gradually increasing,2023In the first quarter of 2019, Vietnam’s merchandise trade deficit with foreign countries is expected to exceed 40.7US$. According to data released by Vietnam Statistics Office (GSO), in the first three months of this year, VietnamGDPyear-on-year growth3.32%, lower than the previous quarter 5.92%, which is also lower than the market consensus 4.8%, for2011year to2023year12The lowest increase in the year. GSO said,GDPThe growth rate slowed down, mainly due to the decrease in consumer demand,3In March, overseas sales contracted year-on-year14.8 %, exports fell this quarter11.9%.

Vietnam is one of the largest textile exporters in the world, and textile and footwear manufacturing is an important pillar of the Vietnamese economy. However, with Vietnam’s exports shrinking and economic growth slowing, the industry is also facing huge challenges. According to the Vietnam Textile and Garment Association, this is mainly due to the sharp drop in purchasing power in markets such as the United States and the European Union, resulting in many companies not receiving any new orders,2023In the first quarter of 2019, Vietnam’s textile and footwear orders fell by 70% year-on-year70%to80%.

PureMDIAs an important shoe material and textile material, it has also received this Influence. Polyurethane has excellent physical properties and chemical stability, so it is widely used in footwear, furniture, automobiles, construction and clothing. Due to shrinking exports and reduced orders, Vietnamese footwear manufacturers are also facing production pressure and intensified market competition. In addition, Vietnam does not have the enterprises and capabilities to manufacture pureMDI, so it mainly relies on imports, such as China, Japan, Korea and other countries. According to the data of Vietnam Textile and Garment Association,2023year3In May, Vietnam’s textile and clothing exports reached about 32.9832.98 100 million US dollars, a month-on-month increase18.11%, Year-on-year decrease12.91%. From the perspective of pureMDIexported from China to Vietnam, the pureMDI of Vietnam in the first quarter =”font-family:”Microsoft Yahei”,sans-serif”>Although the consumption is compared to2022 A relatively significant improvement, with a year-on-year increase of 24%, but compared to2021The average annual compound growth rate of the year is still negative, it can be seen that in the past two years, Vietnam’s pure MDI Demand has declined.

table1:2021-2023China’s exports to Vietnam in the first quarter span>MDI quantity

Data source: customs data collation

In addition, Vietnam, as the four major automobile producers in ASEAN,2023 The first quarter of 2023’s automobile production will appear A more significant downside,1to3Monthly total output decreased by 29.5% year-on-year, which was mainly due to the decrease in overseas orders and overseas Investment in Vietnam’s auto industry has also declined.

Figure 1: 2022-2023 Vietnam’s automobile production and year-on-year growth rate in the first quarter

Data source: ASEAN Automobile Federation

The World Bank also said in an earlier report that commodity- and export-dependent economies like Vietnam are particularly vulnerable to slowing demand, including exports. In the second half of 2023, it is expected that with the gradual recovery of the economy, Vietnam’s textile, clothing and footwear market will expand this year span>7Month to8 The opportunity for recovery is ushered in this month, but the local auto industry may not be able to recover its previous momentum, mainly because Vietnam is still dominated by light industry, and the auto industry lags far behind Thailand, Indonesia and other big countries.