General

According to the customs data, since September 2022, Vietnam's export of goods trade has gradually declined. The difficulties previously predicted are becoming reality, and the decline in exports is expected to continue until the beginning of 2023.

Export accelerated decline

In recent months, Vietnam's export of goods trade has shown an accelerated downward trend. According to Vietnamese customs data, in the first half of November 2022 (November 1-15), Vietnam's total import and export of goods trade was 28.4 billion US dollars, down 6.3% from the second half of October (October 16-31), including 13.63 billion US dollars, down 16.7%.

It is worth noting that the export of some major export commodities declined significantly. The export of computers, electronic products and parts decreased by 41.2%, the export of mechanical equipment, tools and parts decreased by 14.3%, the export of telephone and parts decreased by 10.9%, and the export of crude oil decreased by 49.2%.

As the leading export force in Vietnam, the export of foreign-funded enterprises decreased significantly. The export in the first half of November was US $10.07 billion, down 18.1% from the second half of October.

According to customs data, Vietnam's exports of goods in September reached US $29.82 billion, down 14.6% from August. The export value in October was 30.37 billion US dollars, a slight increase of 1.9% on a month on month basis. However, the first half of November saw a sharp drop of 16.7% compared with the second half of October.

Relevant departments of the Vietnamese government believe that the main reason for the decline in exports is that the United States, Europe, Japan, South Korea and other major export countries have experienced high inflation and reduced market demand. At the same time. Regional and global geopolitical tensions and trade protectionism also have a great impact on Vietnam's exports.

A large number of workers are unemployed

Under the background of the current global economic difficulties, Vietnamese enterprises are generally facing a shortage of orders and construction. Chen Qinghai, executive vice chairman of the Vietnam Federation of Trade Unions, said that more than 240000 workers in the textile, footwear, wood products and other industries were lack of jobs due to the contraction of production.

At the same time, the phenomenon of reducing workers and working hours is still widespread, and the situation is becoming increasingly serious. Since September, the working hours of more than 470000 workers have been cut, and about 40000 workers have been laid off, of which 30000 are women.

The workers told the media that it was worse than the worst period of the COVID-19 epidemic. At that time, they could get food donations from the government at home. After the COVID-19 quarantine policy was released at the end of 2021, the surge in export demand brought a lot of work.

Nguyen Thi Thom, a local worker who produced clothes for Wal Mart, sighed that he could quickly find a new job after the pandemic, but it was not easy to find a job now, as it was then.

However, in order to avoid failing to recruit people when the economy improves in the future, some enterprises try their best to retain workers. Vietnam Baoyuan Co., Ltd. is the enterprise with the largest number of employees in Ho Chi Minh City. Due to the sharp decrease in orders, the company was forced to let 20000 workers in its branches take a rest in three months. During the vacation, workers can receive 180000 Vietnamese dong (about 7.5 dollars) per day to retain workers.

Manufacturing industry is impacted

This year, the exceptional "frugality" of Western consumers made Vietnam's factories unable to receive enough orders, and they had to find ways to protect themselves. Even Samsung Electronics, Vietnam's largest foreign company, has reduced its smartphone production in Vietnam. According to customs data, Vietnam's manufacturing PMI fell rapidly to 47.4 in November from 50.6 in October, the first time in 14 months that it was lower than the 50 line.

In addition, the sales price of Vietnam's export products has fallen for the first time since August 2020, which means that Vietnam's manufacturing industry is facing a double blow of falling prices of finished products while rising costs, and profit margins are further squeezed. In addition, according to Vietnamese customs data, Vietnam's export trade volume in November was the lowest monthly export figure since the Russian Ukrainian conflict.

Tran Viet Anh, Vice President of Ho Chi Minh City Business Association, was shocked by the slowdown, because Vietnam's export enterprises were still operating at full capacity in the first half of this year. However, since the third quarter, global inflation and weak consumption have rapidly reduced the scale of import and export trade. Now Vietnam still needs to deal with a large number of inventory problems.

However, Viet Anh believes that the downturn should be temporary. In 2023, Vietnam will enter the stage of increasing production again, just like the recovery brought by the COVID-19 - production reduction will lead to a shortage of goods, and then a rapid demand surge will be formed.

In fact, since this year, Vietnam's economy has recovered rapid growth. In the third quarter, the gross domestic product (GDP) increased by 13.67% over the same period last year, driving the first three quarters' GDP growth by 8.83% over the same period last year. The IMF forecasts that the economy will grow by 7-7.5% in the whole year. However, since the fourth quarter, due to the continuous reduction of international market demand and the complex and severe financial situation, the IMF predicts that Vietnam's economy will grow 5.8% in 2023.

However, regardless of the subsequent economic trend, Vietnam urgently needs to find a way out for factories without orders and laid-off workers.