Textile industry outlook seems promising amidst worldwide adjustments in supply chains
Vietnam's Textile and Garment Sector Gains Momentum Amid Global Dynamics
Hanoi, Vietnam — The textile and garment sector in Vietnam is experiencing a robust growth surge, fueled by favorable global market dynamics and strong export performance.
Investors have interpreted recent statements from U.S. President Donald Trump, suggesting a shift toward advanced industries, as an indication of increased opportunities for Vietnam to expand its role in global apparel supply chains. Trump emphasized that the U.S. should concentrate on emerging sectors like artificial intelligence and military equipment, rather than traditional manufacturing such as apparel.
These comments have been perceived as a sign that the U.S. may further outsource textile production, which could potentially benefit countries like Vietnam.
The Vietnamese stock market reacted positively to these developments, with shares of various textile companies, including Vinatex (VGT), TNG Investment and Trading JSC (TNG), Hòa Thọ Textile & Garment JSC (HTG), Thành Công Textile Garment Investment Trading JSC (TCM), Sông Hồng Garment (MSH) and GIlimex (GIL), recording their highest daily gains. The momentum continued the following day, with HTG maintaining its upper limit, and other stocks like TNG, VGT, and TCM posting gains above 6 percent. This surge reflects renewed investor confidence in the sector's growth prospects.
Vietnam's status as the world's second-largest textile exporter, trailing only China, highlights its significance in the global market. According to Vietnam Customs, textile and garment exports reached $8.69 billion in the first quarter of 2025, with the U.S. accounting for 43.6 percent of this figure. Notably, there was a 15 percent year-over-year increase in April, amounting to $3.64 billion.
Several factors contribute to this positive outlook. Major U.S. retailers are reportedly facing low inventory levels, particularly for fall and winter apparel, with adequate stock lasting only six to eight weeks. Additionally, the decline in Chinese market share in Japan and South Korea has been attributed to increased scrutiny of tax evasion practices by Chinese companies amid ongoing trade negotiations between the U.S. and its trading partners. Meanwhile, competitors like Bangladesh and Pakistan are grappling with energy shortages and political instability, which are hindering their production capabilities.
This scenario positions Vietnam as a reliable alternative for international buyers seeking stable supply chains. Domestic garment production remains robust, as evidenced by the consistent upward trends in the Industrial Production Index (IIP) and labor indices without any months of contraction since the beginning of 2025.
Previously, during a May seminar organized by Vinatex, Dr Lê Tiến Trường, chairman of Vinatex's Board of Directors, highlighted significant opportunities for orders in the textile industry for the first six months of the year. He also suggested that this positive trend could extend through the end of the third quarter of 2025.
Workers at a yarn production line. - VNA/VNS Photo
Trường also spoke about potential temporary countervailing tax policies that could be introduced by the US starting from July 10, pending the outcomes of negotiations between the Ministry of Industry and Trade and the government. Although orders in the third quarter are expected to remain strong due to low US inventories, there may be a 10 percent decline in Q4 due to reduced consumer demand in the U.S.
Industry experts suggest that the current market conditions could herald a new growth phase for Vietnamese textile stocks, as they have surpassed medium-term resistance levels, and any supportive international policies or increased order volumes could further propel their ascent. However, challenges persist, such as an increase in domestic electricity prices that has raised production costs, particularly for yarn manufacturers with narrow profit margins. Nonetheless, companies must navigate these cost pressures while capitalizing on emerging global opportunities.
- The positive response from the Vietnamese stock market, with textile companies like Vinatex, TNG, HTG, TCM, MSH, and GIL recording their highest daily gains, demonstrates increased investor confidence in the sector's growth prospects amid the shifting global dynamics.
- As Vietnam focuses on expanding its role in global apparel supply chains, the potential outsourcing of textile production by the U.S. could lead to further benefits for countries like Vietnam, given the U.S. President's emphasis on emerging sectors like artificial intelligence and military equipment.
- The ongoing global trade dynamics, characterized by rising scrutiny of tax evasion practices and energy shortages in competitors, position Vietnam as a reliable alternative for international buyers seeking stable supply chains in the textile industry, potentially propelling Vietnamese textile stocks into a new growth phase.
