HCMC – High inflation in the United States could impact Vietnamese textile and garment exporters although their shipments there in the first half of 2022 grew by 22% year-on-year to US$9.3 billion, accounting for over 50% of the country’s total apparel exports.
Soaring inflation has sent U.S. consumers’ consumption of textiles and garments waning, making it tough for local exporters to ramp up shipments to the market.
Vietnamese apparel exporters are expected to see their orders plummet in the rest of this year.
The U.S. economy is facing headwinds, leading to caution in spending on clothes. U.S. consumers are prioritizing other necessities instead.
In the first quarter of 2022, the expense on clothes represented a mere 3.9% of U.S. consumers’ total spending and fell 4.3% against 2019.
GlobalData’s April survey cited by ThredUp, a U.S. secondhand clothes retailer, showed that 44% of 2,000 participating adults were cutting their purchase of textiles and garments.
Analysts forecast the United States’ apparel import will decline for the rest of the year, hitting Vietnamese textile-garment exporters.
Besides, local apparel firms are also facing rising material and fuel prices.
According to a recent report released by SSI Research, the revenue growth of Vietnam’s apparel firms will slow down in the second half of 2022 and 2023.
Vietnam exported textiles and garments worth US$18.5 billion in the first half of 2022, up 20% year-on-year, according to data from the General Department of Vietnam Customs.
In June alone, the country’s outbound apparel sales amounted to US$3.6 billion, a 13% year-on-year increase.
Despite the positive results in apparel exports in the first half, the textile and garment industry will face a big challenge caused by rising inflation in some of Vietnam’s major importers such as the United States and the European Union, said a representative of the Vietnam Textile and Apparel Association.
In addition, the Russia-Ukraine conflict has pushed up the prices of materials and fuels and the costs of transport, resulting in a thinner profit margin for exporters.