Though down from the 13.5% increase reported for August 2015, imports continued their upward trajectory reaching 2.69 billion square metre equivalents (SME), up from 2.56 billion SME for September of 2014, which is good news for the Vietnam apparel and textile industries.Keeping the potential Trans Pacific Partnership (TPP) benefits in mind, should the trade accord materialize, Vietnam’s clothing and textiles industries are increasingly receiving encouraging responses from the western buyers.
Breaking the OTEXA figures down further, shipments from China – the largest supplier of apparel to the US – were up 1.48% to 1.32 billion SME, while nearest rival Vietnam grew at a much faster rate, jumping 10.6% to 281 million SME, compared to September 2014.
Vietnam is clearly benefiting as transnational and domestic producers alike operating within the country’s borders are diversifying their supply chains in a bid to position themselves to take advantage of the opportunities the TPP might open for them.
At a recent meeting reviewing the results of operations for 2015, the Thai Binh Group (TBS) unveiled plans to increase exports to the US to a new high of 30 million pairs of shoes and 14 million bags. The TBS group has also increased the production of handbags it makes under the Coach brand.
Coach is a luxury fashion company headquartered in New York City. The company is principally known for accessories and gifts for women and men, including handbags, men's bags, women's and men's small leather goods, footwear and outerwear as well as other fashion accessories.
Over the past year, TBS’s export growth to the US market has surged 18% higher than the average growth rate of other Vietnamese goods into the market spiking to 23 million pairs of shoes and 11.5 million of handbags in 2015.
Nam Long Co, Ltd, which specializes in producing rubber gloves, reports it has just expanded production to an all-time high of 10 million pairs of gloves annually in anticipation of increased demand from the market.
Meanwhile, Le Quang Hung, general director of the Saigon Production and Trade Joint Stock Company (Garmex Sai Gon) said the rate of garment orders by his company from the US market has spiked by 60%.
The US market has captured renewed attention from transnational and domestic businesses operating in Vietnam as the US economy is generally perceived as having started to bounce back following several years of stagnation.
Many leading economists have predicted the US economy is predicted to grow at between 2.2% and 3% in 2015 and at an average of 3% as of 2016, which if true, bodes well for domestic consumption and imports of clothing and fashion items produced in Vietnam.
As a result, the domestic labour market has been formed and developed on the right track. The State no longer played the role of directly creating jobs, instead it now creates the necessary environment for job generation while ensuring labourers’ rights through improving the legal system.
Acknowledging the market economy’s risks and ensuring the unemployed find jobs soon, the policy on unemployment insurance has been enforced. During that time, labour relations have also improved. As of October 2015, the number of strikes had fallen by 25 percent compared to the same period in 2011.
Thanks to new policies and mechanisms on employment and developing the labour market, more than 7.8 million jobs were created throughout the country from 2011-2015, helping reduce the unemployment rate to below 4 percent in urban areas. Last year, over 1.6 million people found new jobs, of which approximately 115,000 people went abroad to work.
Vocational training has been linked to the demands of the market and businesses, and international integration requirements. The forms of vocational training have been diversified, with priority given to people in rural areas, ethnic minorities and people with disabilities.
However, several targets have yet to meet expectations. The proportion of labourers working in the agricultural sector and the non-official sector remains high, accounting for nearly 65 percent of the total.
The number of workers who have taken out social insurance accounts for only 20 percent of the total, posing a challenge for fulfilling the target of 50 percent by 2020. Integration into ASEAN is also posing challenges for Vietnam as the newly-formed ASEAN Community will allow the free flow of labour among the bloc’s countries.
The Ministry of Labour, Invalids and Social Affairs forecasts that Vietnam will have 59.13 million labourers by 2020 and around 68 million labourers in 2030. In 2020, the rate of trained workers is expected to reach 70 percent.
To improve labour quality and utilise human resources effectively, the ministry will continue to update the legal system and align the domestic labour market with international integration requirements in order to ensure a modern, effective, competitive and equal labour market, thus contributing to fulfilling development targets in the 2011-2020 Socio-Economic Development Strategy.
