Exporters expect difficult year ahead

The last months of the year are often the peak season for import and export activities to serve soaring consumption during the Christmas and New Year season, but this year it did not happen.

According to Tran Nhu Tung, chairman of the Board of Directors at Thanh Cong Textile Garment Investment Trading JSC (TCM), a majority of textile apparel firms exporting products to the US and EU markets are experiencing a decline in order intake due to still high unsold stock facing their business partners. Meanwhile, inflation has caused consumer demand to reduce.

As for TCM, although the company’s post-tax profit for the whole year 2022 surpassed $12 million, showing a 15 per cent jump over the plan approved by the general shareholder meeting, this resulted from prosperous business in the first half of the year.

Tung said that from the end of the third quarter, TCM had faced a decline in orders, especially from the US. Not only textile products but other key exports such as seafood, wood, and leather shoes also faced a decrease.

Orders from Vietnamese exporters are slowing down

November was the first month this year when seafood exports declined (down over 14 per cent) compared to last year's period, falling by $780 million.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers, said that the world economy was forecast to face mounting difficulties, with the seafood industry being one of the most directly affected.

According to Hoe, many seafood enterprises recorded negative growth in the last two months this year, and this situation may persist in the first quarter of 2023.

The situation might improve from the end of Q1 next year when uncertainties in Vietnam’s major export markets, such as the US and EU, gradually lessen.

A representative of An Giang Fisheries Import-Export JSC (AGF) said that at this time, the company is managing to maintain operations to keep orders.

In the face of inflation, consumers have to tighten their spending, and AGF has shifted into producing value-added items in the middle segment.

An apparel firm listed on HSX said that the company’s orders in Q4 this year had dwindled compared to the first three quarters, especially compared to the first half. That was due to softened demands in the US, its key export market.

Accordingly, the company’s order intake in Q4 shed 10 per cent compared to Q3 but was 30 per cent lower compared to Q2, equivalent to about a 20 per cent revenue decrease compared to last year.

According to VNDirect Securities, Vietnam's export value would expand 9-10 per cent in 2023, decelerating compared to the 14 per cent growth in 2022.

Tran Khanh Hien, analysis director at VNDirect Securities, noted that demands in Vietnam's leading export markets, such as the US, EU, and even China, have tended to fall since the end of Q3 and would further decrease in 2023, badly affecting exports.

VNDirect expects Vietnam's trade surplus to increase to $12 billion in 2023 from an estimated $10.4 billion in 2022.

According to Garmex Saigon JSC’s leader, the pressure on the domestic interest rate and the exchange rate could last until the second quarter of 2023. It should ease significantly when the US Federal Reserve shifts monetary policy to a more neutral stance.

Many businesses believe that the export market will be fraught with difficulties in the first half of 2023 but will be somewhat stable from the middle of the year.

Tight policy at head of priorities for 2023 Vietnam’s stock market will be subject to unpredictability in both the global and local economies in 2023, prompting investors to seek safe-haven stocks.

Economy preparing for tricky 2023 Growth in Vietnam’s economy may slow down next year due to massive complexities, including a reduction in global demand caused by tightened spending.