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Furniture exports drop 30 percent in first half as demand shrinks
Vietnam’s furniture exports are expected to shrink by 30 percent to US$1.3 billion in the first half of this year due to declining global demand, an industry representative has said.
Nguyen Ton Quyen, Secretary General of the Vietnam Timber and Forest Products Association, said foreign customers placed fewer orders at much lower prices this year compared to last year.
Quyen said factories in Binh Dinh and Dong Nai provinces, the country’s furniture hubs, were struggling to secure new orders to keep jobs for workers.
However, many factories have also had to turn down orders because the offered payment was too low for the products, he said.
Huynh Van Hanh, Director of Minh Phuong Furniture, said he “couldn’t believe” that his company had received no orders from foreign customers in the first half of the year.
Hanh’s company has been lucky to secure subcontracts from other local furniture businesses and has not had to lay off workers.
However, many other small businesses are struggling to just to pay their electricity bills, said Hanh, who is also Deputy Chairman of the Ho Chi Minh City Handicrafts and Wood Industry Association.
Vo Truong Thanh, Chairman of the Truong Thanh Furniture Corporation, said 70 percent of furniture businesses were facing losses this year.
However, “we hope the situation will be brighter in the second half as light recovery is being seen in markets,” said Thanh.
He said also that Vietnam’s exports to the US would improve sooner than to other markets.
Thanh’s company saw a 12 percent increase in contracts signed with US customers in the past two months, he said.
“With the new contracts we hope to keep operating until next April,” Thanh said, adding that the recovery in US consumer spending in recent months was boosting the number of contracts.
Vietnam’s furniture exports to European markets would grow slower since the bloc’s economic recovery would take more time than the US’s, according to Thanh.
Vietnam exported $940 million worth of furniture and wood products in the first five months of the year, nearly a 20 percent decrease year-on-year, according to the General Statistics Office.
Minh Quang
thanhnien
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