Textile and garment exports have shown signs of being in difficulty in recent times and the situation will continue into 2023, according to a report on the industry from the Rong Viet Securities Corporation (VDSC).

VDSC forecasts that the industry’s exports will actually deteriorate further in the first half of next year as the negative developments in the macro situation continue to put pressure on consumption in Vietnam’s main textile export markets and inflation in the US. Vietnam’s main export market, the US, is expected to gradually decline, affecting consumer demand for essential goods, including garments.

Retail sales of clothing and footwear in Vietnam’s main export markets have struggled since October, signaling ongoing problems for textile and garment enterprises.

In the third quarter of this year, apparel products in the non-food retail group recorded the lowest growth in the UK. VDSC believes that customers of Vietnamese textile and garment enterprises will find it difficult to boost sales in a weakening consumption market.

European consumers are also expected to cut spending on apparel and footwear, especially those in the low-income group.

While demand in export markets slows, the high inventories of apparel products being maintained by brands and retailers will worsen the outlook for export orders in Vietnam in the second half of next year. VDSC believes it will be a challenging time ahead and advises investors to wait for signs of recovery in consumption.