Embracing the Recovery Wave, Numerous Export Industries Earn Billions of Dollars
Tran Duc Joint Stock Company has just received an export order for 600 modular wooden houses to be shipped to Hawaii. As of now, the company has filled orders for modular wooden houses until June. In addition to modular wooden houses, the company’s furniture segment has filled orders for the US and European markets until September 2024. Vo Xuan Thuyen – CEO of Tran Duc Joint Stock Company – said that the US and Canada markets promise lucrative opportunities. In Canada, the demand for housing is very high.
Embracing the recovery wave, highest trade surplus since 2014
According to businesses in the wood industry, many companies have recovered 80 – 90% and have orders in hand until April – May. The export situation has shown positive signs since the beginning of the year.
Not only wood, sectors like textiles and garments, leather shoes, iron and steel, electronics, seafood, fruits and vegetables, rice, and coffee have all experienced high growth compared to the same period last year. Businesses have received many orders from the beginning of the year and have increased production.
According to statistics from the General Department of Customs, footwear exports have shown signs of recovery in the early months of 2024 with double-digit growth. In the first half of February (from the 1st to the 15th), footwear exports reached nearly $500 million. In total, from the beginning of the year to February 15th, footwear exports earned nearly $2.5 billion, an increase of nearly 16% compared to the same period last year (equivalent to an additional $300 million).
Phung Duc Tien – Deputy Minister of Agriculture and Rural Development – said that in February 2024 alone, agricultural, forestry, and aquatic exports reached $4.48 billion, an increase of 21.8% compared to the same period last year. In the first two months of the year, the total export turnover of agricultural, forestry, and aquatic products is estimated at $9.84 billion, an increase of 50.3%, with a trade surplus of $2.68 billion, nearly 3 times higher. Notably, the quality of Vietnamese agricultural products is increasingly recognized by the US, EU, and Japanese markets.
According to figures from the General Statistics Office, in the first two months of the year, the total import-export turnover of goods reached nearly $114 billion, an increase of nearly 19% compared to the same period in 2023.
Thanks to positive market signals in major importing countries, the export turnover in the first two months of the year increased by over 19%, reaching nearly $59.4 billion. 11 products recorded an export turnover of over $1 billion, with 4 main groups (electronics, computers, phones – components, machinery and equipment, and textiles) earning over $5 billion from these markets.
In contrast, Vietnam imported goods worth over $54.6 billion, including machinery, fuel for production, increasing by 18% compared to the same period in 2023. Foreign-invested enterprises remain the main source of imported goods and materials for domestic production, with nearly $35 billion.
In terms of markets, China continues to be Vietnam’s largest import market, with nearly $21 billion. Meanwhile, the US is the largest destination for Vietnamese goods, with exports reaching $17.4 billion in the first two months.
As such, Vietnam’s trade surplus reached over $4.7 billion – the highest level in the same period of the past 10 years. Surpluses to the US and EU increased by nearly 37% and 14% compared to the same period last year. In the Japanese market, the trade deficit of $200 million in the past year turned into a trade surplus of $400 million. The trade surplus contributes to macroeconomic stability, ensuring significant balances for the economy and supporting international payment balances.
According to the Ministry of Industry and Trade, although the global economy is difficult to predict and the demand for goods in many major markets is declining, the achieved export results in the first two months of this year still show high growth. This demonstrates the great efforts of businesses and authorities in improving the efficiency of traditional markets and even exploring new and potential markets.
Do Thi Ngoc – Deputy Director General of the General Statistics Office – assessed that high export-import activities also promote domestic production, providing growth momentum for the three key sectors: agriculture-forestry-fishery, construction industry, and services. These are the driving forces of growth.
Still Many Challenges for the whole Year
According to the Ministry of Industry and Trade, while exports to traditional markets have been slowing down, new markets such as Africa, West Asia, Eastern Europe, and North America have shown growth in export value… Therefore, the decline in trade continues to narrow from the second half of 2023 and rebounded at the beginning of 2024.
The supply chains that we previously wanted to form in Vietnam to produce Vietnamese goods have begun to take shape. Therefore, these companies have met the criteria to meet origin rules and take advantage of exports.
Regarding the textile and garment industry, Le Tien Truong – Chairman of the Board of Directors of the Vietnam National Textile and Garment Group (Vinatex) – assessed that Vietnam has entered 2024 with strong production and business potential, along with a strong business spirit. In 2024, there are fundamentally forecasts indicating a potential improvement of the global economy, especially in the US with signals of possibly cutting interest rates up to 0.75% to drive consumer demand.
Also according to Le Tien Truong, in the context of many competitive countries facing labor problems and armed conflicts domestically, while Vietnam is a safe destination and a new motivation for orders to have a better chance of returning.
Although it’s only the first two months of the year, many export sectors of Vietnam have earned billions of dollars. Despite this, there are still concerns that the recovery may not be sustainable because two months are still too early to assess the outlook for the whole year.
The number of new export orders has increased slightly for the second consecutive month, thanks to improved new orders from abroad. However, the growth rate of new export orders has slowed down, and the increase is only slight.
Assessing Vietnam’s manufacturing sector in the first month of 2024, Andrew Harker – the Senior Economist at S&P Global Market Intelligence – said that overall growth remains relatively weak, which causes companies to continue to be cautious in purchasing activities and maintaining inventory.
According to experts’ assessments, although many opportunities are coming to Vietnam’s export industries, in order to take advantage of these opportunities from the market, production efforts are not enough, but also one must understand and take more initiative in the international market.
