Optimistic signals in the third quarter of 2023 are an important stepping stone for industrial production to achieve growth in the final months of the year in the face of general difficulties of the global economy.
Workers of Dong Tay Company (Tan Uyen City) have returned to work overtime to fulfill orders
To overcome difficulties
Although the global economic situation is still difficult and market demand has not recovered, a stable macroeconomic foundation and synchronous measures to support production, expand the domestic market and exports have been deployed resolutely, thus industrial production in October continued to have positive signs. It is estimated that the index of industrial production (IIP) in October increased by 3.26% over the previous month, up 9.72% over the same period last year. Notably, the manufacturing and processing industry increased by 3.3% over the previous month, up 10.14% over the same period last year.
However, difficulties from the global economic downturn, especially from the first months of the year, have affected industrial production results. In the past 10 months, industry only increased by 4.16% year-on-year. Among them, a notable thing is that the manufacturing and processing industry increased by 4.31% year-on-year. Although this number is far from the target set for 2023, this is a great effort of the local business community in the tough context.
Overcoming the difficulties and challenges of the first three quarters, at the beginning of the fourth quarter, the wood industry became again one of Binh Duong's bright spots in terms of export turnover. Previously, due to the impact of the global economic crisis, production and business activities of enterprises were affected due to consumers tightening spending. In October 2023, export turnover of the wood industry is estimated to reach US$609.93 million, up 38.5% over the previous month, down 15.1% over the same period last year, accounting for 21.93% of total export turnover of the whole province. This number is a good news, because in previous quarters this number sometimes decreased by up to 50%.
It is forecasted that the wooden furniture export market in the coming time would show signs of recovery when the economies in countries importing Binh Duong wood and wooden products have showed signs of growth. Nguyen Liem, Chairman of Binh Duong Furniture Association, commented: “US inflation is decreasing, employment in this market is also increasing, especially home construction and sales are starting to show positive signs again. From these signals, it is expected that Binh Duong's wooden furniture exports to the US - the largest market for Vietnamese wood and wood products (accounting for about 60%) would grow again. However, currently, it is difficult to predict the near future. Because, although inflation has decreased, military conflicts occur and geopolitical competition still exists.
Also according to Liem, it is difficult to know how the market would recover. However, inventories will eventually decrease. Certainly US buyers will start placing orders again to compensate for the decrease in inventory, however, the orders will not be as large as before. It takes time for the market to recover and become as good as it was in the 2020-2022 period.
However, this recovery is compared to the previous months and cannot be compared to the same period last year. The current recovery is physical, because usually at the end of the year, customers in other countries need to repair and decorate their homes, so orders will increase. Wood industry enterprises are also trying their best for growth goals in 2023 and establishing orders for 2024.
Accelerate production
The Provincial People's Committee is also focusing on key solutions, such as continuing to remove difficulties for businesses to promote production development on the basis of closely following the situation of industries, fields, and some key industrial localities.
To stimulate this sector, during this time the business community needs many policies to remove difficulties for production and business to continue to be actively and synchronously deployed, especially monetary policies and interest rate reduction. Nguyen Thai Minh Quang, Director of Vietcombank Binh Duong, said that the bank opened many interest rate reductions to support economic growth, which will make a positive impact to promoting production and consumption in the last months. Currently, Vietcombank has many support and consulting programs for each business to ensure capital for production and economic recovery.
Industrial enterprises themselves are also making efforts and putting effort into the last months of the year. Phan Thanh Duc, General Director of Binh Duong Garment Joint Stock Company, shared that from the first half of 2023 onwards, like many other businesses in the textile and garment sector, this company must face many difficulties and challenges, especially in the consumer market when aggregate demand declined sharply. Additionally, the rising cost of input materials made products less competitive, but thanks to promoting the application of digital transformation, investment in production lines, and advanced and modern production technology to increase productivity and product quality, the company has retained many important partners, sought many new orders for the fourth quarter of 2023 and the first months of 2024. At this time, the company is still accelerating production and recruiting more workers to meet the orders.
Nguyen Thanh Toan, Director of Provincial Department of Industry and Trade, said that the industry and trade sector also enhanced connecting domestic enterprises to participate in the supply chains of large global FDI enterprises investing in Binh Duong. Department of Industry and Trade also assists businesses in administrative procedures, access to support programs for science and technology development, and domestic and foreign trade promotion.
Vo Van Minh, Deputy Secretary of the Provincial Party Committee, Chairman of the Provincial People's Committee: Sectors and localities need to continue to proactively and effectively implement business support policies approved by the Government to remove difficulties and obstacles in production and business activities of enterprises. Promote industrial production to serve export and domestic consumption, creating more capacity for production and business development of enterprises.
Reported by Tieu My - Translated by Ngoc Huynh
