Vietnam’s textile and garment sector could see more job losses in the second half of the year because of order cancellations by global buyers, according to a recent report by the ministry of industry and trade, which said textile production grew by 2.8 per cent year on year (YoY) in the first half of the year compared to 11.5 per cent in the same period last year.
Garment production fell 4.7 per cent with the industry having difficulties sourcing raw materials and rapidly losing export orders to the pandemic, Vietnamese media reported.
Many export orders were cancelled or delayed in May and June. U to half of the global orders were cancelled or postponed in May, and global prices fell by 20 per cent as a result of the plunging demand, said the ministry report.
Another report by the Vietnam Textile and Apparel Association (VITAS) said 80 per cent of businesses in the industry laid off personnel in April and May, and more cuts are expected in the third quarter.
Le Tien Truong, chief executive officer of the Vietnam National Textile and Garment Group, said the company’s revenues and profit have fallen by half. The company is making efforts to retain as many of its staff as possible, but if the current situation persists for more than six months, cuts are probable, he said.
Most companies have shifted their focus from clothes to face masks to meet the rising demand globally. Vietnam exported 557 million masks in the first six months, with the United States, Germany, Singapore and South Korea being the main markets, customs figures show.
But mask exports reportedly cannot make up for the lack of garment orders.