Woodwork exports to EU, US drop as consumers cut spending
The report “Changes in the export markets of the woodwork industry – from the perspective of businesses” prepared by the Vietnam Timber & Forest Products Association (Vifores), Forest Products Association of Binh Dinh (FPA Binh Dinh), Handicraft and Wood Industry Association of HCM City (Hawa), Binh Duong Furniture Association (BIFA) and Forest Trends, described the current situation.
There have been fluctuations in demand and supply of materials and wooden products in large markets such as the US and EU because of the impact of the Covid-19 pandemic, and the Russia-Ukraine conflict which have led to high inflation in many countries.
Production, transportation and living costs are getting more expensive and demand for non-essential goods is decreasing.
“With its deep integration into the world market, Vietnam’s woodwork industry has been impacted by the fluctuations and declines in major export markets, including the US, EU and UK,” the report said.
Of 52 businesses of different scales selected for the survey, 45 export products to the US market (87 percent), 39 to the EU (75 percent), 24 to the UK (46 percent), and 28 to other markets such as Singapore, Japan and South Korea (54 percent).
As many as 45 out of 52 surveyed enterprises export woodwork products to the US. The revenue of these enterprises in 2021 accounted for 58 percent of total revenue of total enterprises.
The US market has seen the biggest changes among Vietnam’s export markets. Thirty-three enterprises have seen revenue from the US drop by 39.6 percent in the first months of the year. The decreases were between 8 percent and 80 percent. Only 10 enterprises reported revenue increases, about 11 percent on average.
For the EU market, in 2021, the export turnover from EU countries of 39 enterprises accounted for 33 percent of their total turnover.
Twenty-four woodwork exporters to the EU have seen revenue decreasing this year with an average decrease of 42.2 percent. Some enterprises say they have even lost revenue from the EU. Only four enterprises reported revenue increasing slightly by 14 percent on average.
Twenty-six out of 52 enterprises exported products to the UK with revenue accounting for 19 percent of total export turnover in 2021. In the first months of 2022, 17 enterprises reported a decrease in revenue, by 42.8 percent on average. Of these enterprises, three have lost all of their revenue from the UK market.
Eighty percent of enterprises predicted that their revenue in 2022 would be lower than in 2021.