The Textile, Garment and Footwear industries are two of the industries heavily affected by the Covid-19 pandemic. The interrupted supply chain of input materials, the import markets had to close due to the implementation of social lockdown to prevent a pandemic, the decrease in demand for products were the difficulties that the industry faced this year. However, in the last months of the year, the sector’s growth got a boost when the pandemic was well controlled in Vietnam.
Textile and garment industry
According to the General Statistics Office (GSO), the index of industrial production (IIP) of the textile industry in 11 months of 2020 decreased by 0.4% over the same period last year, of which the IIP in September decreased by 6.3%; in October decreased by 5% and in November it rose again by 1.3%. Similar to the garment manufacturing industry, the decrease in IIP over the same period last year was narrowed down, by 7.2% in August; decreased by 4.1% in September; went down by 3.1% in October, only in November strongly recovered with a growth rate of 3.6%. This result is due to the fact that the textile and garment enterprises have sought to seize opportunities in the challenge, quickly converting the traditional texture products to ones that are capable of adapting to the new situation such as protective products, products for the health sector to prevent a pandemic. Of which, natural textile production in November 2020 increased strongly by 24.2% over the same period last year; the output of textiles made from man-made fibers increased by 3.3%, significantly recovering compared to a decline by 9.6% in October and 5.2% in September; casual clothes rose 3.4%. Export turnover of textiles and garments in eleven months of 2020 reached 26.73 billion USD, accounting for 10.5% of total export turnover, down by 10.5% over the same period last year. Although the export turnover of textile and garment products decreased, this decrease is still lower than that of other countries, especially in the context that the world textile and apparel demand went down by 25% due to the negative influence of the Covid-19 pandemic, being a great effort of the Textile and Garment Industry[1].In the coming time, textile and garment enterprises need to have new measures to change their production and business methods to meet the new situation, especially the EVFTA being implemented will be a great opportunity for the textile industry to expand the export market. Enterprises need to take advantage of the no-order period to organize training courses to improve workers’ skills to increase labor productivity; concurrently, to diversify export markets instead of focusing on a few markets as before.
Leather and footwear industry
Like other industries, the leather and footwear industry has faced many difficulties due to the influence of the Covid-19 pandemic. However, the domestically well-controlled disease situation and the effective EVFTA will help the footwear industry to grow again.
Although the leather and footwear industry was strongly affected by the Covid-19 pandemic in the second quarter of 2020, the IIP of the industry improved when the decrease in IIP between months was narrowed. Specifically, the increase/decrease of monthly IIP from the second quarter of 2020 compared to the same period last year is as follows: April went down by 16%; May dropped by 12%; in June decreased by 9.6%; in July, August, September, October decreased by 6.2%; 3%; 3.4%; 2.6% respectively, and November turned back with an increase by 0.7%. Europe (EU) is the main import market of Vietnam’s footwear group for many years, ranked at second only to the US market, the EVFTA has created positive changes for Vietnam’s footwear exports, being a big driver for the growth of the footwear and handbag industry in the remaining months of 2020 and 2021. The total exports of footwear and footwear in November reached 1.4 billion USD, up 0.1% over the previous month (down by 0.2% in October). Generally, in 11 months, it reached 14.93 billion USD, down 9.8% compared to 11 months of 2019. Manufacturing enterprises have double difficulties from both sides: a shortage of imported materials and interrupted exports. In the main export markets of America and Europe, the export turnover of this product in 11 months of this year decreased sharply compared to the same period last year. At present, although the market situation cannot fully recover, however, the export turnover of shoes, sandals, and bags is expected to increase again when Free Trade Agreements are effective. Consumer demand for footwear products in Europe and America will increase in the New Year 2021. To achieve the highest level of production and business results in the leather and footwear industry, especially in the context of epidemics. Covid-19 continues to be complicated in the world, businesses in general, including the leather and footwear industry, need to promote the application of technology, lower costs to improve product competitiveness, build models production and business in accordance with the new normal state.
[1] According to the Vietnam textile and garment association.