|Workers at a garment and textile factory (Source: VNA)
According to the municipal Department of Industry and Trade, the index of industrial production (IIP) posted a year-on-year reduction of 2.6% in the first four months. The April index was down 8.3% against March and 9.9% year-on-year.
The city’s export value reached US$3.9 billion, down 5% month-on-month.
Most commodities saw decreases due to a fall in consumption demand among the city’s importers and the postponement and cancellation of multiple orders.
A report by the municipal Statistics Office showed that China remained the largest export market for Ho Chi Minh City’s businesses with a combined export turnover of US$3.4 billion in the first four months, or 26.3% of the total. It was followed by the US, with US$2.1 billion, the European Union, US$1.5 billion, and Japan, US$1.08 billion.
Local businesses operating in industrial production said that they have been hard hit by the COVID-19 pandemic.
Pham Van Viet, Chairman of the Viet Thang Jean Company and Vice Chairman of the Ho Chi Minh City Garment and Textile – Embroidery Association, said that after material supplies from China was interrupted, garment and textile enterprises had faced difficulties caused by the postponement and cancellation of orders from the US and European markets.
Viet said that many enterprises have had 60-70% of their orders cut due to the pandemic, so some have focused on producing face masks and protective gear.
Many acknowledged that the biggest difficulty they are facing is import markets. Therefore, they really need practical support polices from the Government to overcome these difficult times.
Not only domestic firms, but foreign investors and FDI enterprises are expecting assistance from State management agencies.
According to the AHK World Business Outlook 2020 released by the Association of German Chambers of Commerce and Industry (DIHK), German enterprises expect that Vietnam’s economy will recover in the mid-term.
Up to 72% of respondents said they will continue to invest in Vietnam, while 27% plan to recruit more workers. Some 82% said they have been forced to cut revenue growth targets for 2020 due to the pandemic.
Respondents also identified market demand and economic policies as major challenges for Vietnam’s development over the next 12 months, adding that the pandemic has hurt their business at different levels and from different perspectives.
Some 86% of the surveyed enterprises said the suspension of entry and exit and the imposition of travel limits have greatly affected their operations. About 59% said their supply chains have been disrupted, while 55% have seen orders of goods cancelled and 50% have postponed new investment plans.
Chairman of the European Chamber of Commerce (EuroCham) Nicolas Audier hailed the Vietnamese Government’s rapid response to ensure economic stability.
He said COVID-19 is a fast-moving health crisis, and it is creating unprecedented challenges for businesses of all shapes and sizes and in all sectors and industries. Therefore, further actions could soon be required to help both domestic and foreign enterprises weather this storm and get back to business as usual as soon as possible.
“EuroCham is committed to Vietnam’s long-term economic growth, and our members remain available to share their insights and recommendations to help minimise the disruption of COVID-19 on business operations and – above all – to protect the health and wellbeing of people in Vietnam,” he added.