According to the VGCL statistics, the number of affected enterprises is 441 including 331 foreign-invested enterprises, accounting for more than 75 per cent with a total of 624,786 employees in 25 provinces and cities, mainly in the southern region with 68 per cent of total enterprises, more than 88 per cent of total employees affected.
With fewer orders, many wood businesses have decided to give their employees a month-long Tet (Lunar New Year) holiday, twice as long as in previous years.
Vietnamese businesses are expected to face headwinds from inflation, tightening monetary policy and a growing cost-of-living crisis in many of the country’s export markets, experts have warned.
Export orders of Vietnamese wood enterprises to the US market tended to decrease due to the country's initiation of investigations and weak demand amid increased inflation.
High inflation and market volatility have led to the cancelation of large numbers of wood orders, placing wood processing enterprises in Vietnam in a tough position.
Vietnam's exports of timber and wood products have decreased due to the impact of high inflation in the export market, according to the Ministry of Industry and Trade.
The export growth of the wood industry is slowing down due to high inflation in many countries which prompts consumers to tighten spending, while logistics costs and prices of input materials are continuously increasing. Besides, the US is also increasing trade remedies.
Making up 10% of the global supply of wood materials, the ongoing Russia-Ukraine conflict along with the sanctions on embargoes imposed on Russia by the United States and the EU will have a strong impact on the global wood processing and export industry, including Vietnam.
Vietnam's wood processing and export enterprises are currently facing new difficulties and challenges because of the ongoing Russia-Ukraine conflict.
Vietnam sees wood and wood works as a spearhead industry, earning export revenues of $18-20 billion by 2025.