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At the end of the year, businesses still have many difficulties

​As usual, the closer to the end of the year, the more exciting the business activities of enterprises to serve the Tet and export markets, but this year the situation is not much better. Exports are difficult, profits decline even at losses, many businesses suspend production, freeze, even some foreign-owned companies have closed or fled, putting more pressure on the economy. 

According to forecasts of experts, businesses, difficulties will still last, at least into the first months of 2023. Facing the whirlpool of the global economic storm, businesses are worried that it will be difficult to keep themselves.

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In the midst of economic storm, enterprises are forced to manage, find all ways to sustain through difficult periods


Being negatively affected

Difficulties from the outbreak of the Covid-19 epidemic so far have caused many businesses to have not recovered their production and business, many businesses have not escaped losses and debts. The more stalled exports towards the end of the year make the situation more anxious.

The report of Vietnam Textile and Garment Association (Vitas) said that enterprises are in a difficult period, under great pressure. It can be mentioned that the orders from November to December this year, and the first quarter of 2023, decreased by 25-27% on average; especially for enterprises making processed goods, this decline is even more severe. Same goes for other items like wood.

Currently in 2 provinces Dong Nai, Binh Duong has thousands of wood manufacturing and processing enterprises. Orders of many industrial enterprises have decreased by 50% compared to before, leading to a series of companies reducing working hours, partially suspending operations or laying off employees...

In Dong Nai alone, the cash flow health of enterprises is reflected not only in existing operating units but also in attracting new establishment. From the beginning of the year to November 15, the province had more than 3.8 thousand newly established enterprises, up 45.2% over the same period, but the registered capital was only 29.3 trillion VND, equivalent to 60.1%. of the previous year. Meanwhile, there were 464 enterprises dissolved, an increase of 56.4% and 561 branches, business locations and representative offices ceased operations, up 54.1%, at the same time, there were more than 1,1,000 businesses temporarily suspending business, up 67%. The negative indicators all increased, showing that enterprises, especially small and medium-sized businesses, are inefficient, making them shrink their production models to wait for time.

Difficulties from production lead to a decrease in demand for labor. The search for people is few and workers, especially young people, do not "jump" as much as in previous years. Their immediate priority now is to keep their jobs even if their income falls to wait for the next time.

Looking for ways to overcome disadvantages

Research by the Research Board of Private Economic Development (Board IV) shows that enterprises in most commodity industries have found that export and import activities at the end of 2022 and early 2023 will face a lot of difficulties compared to previous ones. Orders in 2023 with many major export sectors are expected to seriously decline, especially textile, footwear, interior, aluminum, iron and steel, cement... Besides other items such as agricultural products and food are also affected. Currently, many enterprises have had to cut workers, reduce production scale in the last months of 2022.

The cause of the decline in orders was mainly due to the tightening monetary policy to combat inflation and the risk of economic recession in many European countries, the US as well as globally, causing a sharp drop in consumption and investment demand; The trend of increasing frequency of trade remedy investigations against Vietnamese goods, especially from the US side, makes many businesses passive and face many disadvantages in market access.

As the main honey bee exporter of Dong Nai, Mr. Phan Trong Nhan, Deputy Director of Dong Nai Honey Bee Joint Stock Company, said that by the end of 2021, the US Department of Commerce (DOC) has issued preliminary conclusions on the anti-dumping investigation on Vietnamese honey products and has imposed an anti-dumping duty on Vietnamese honey of more than 400%. After that, it decreased to about 60%, but it also made enterprises unable to compete with other countries' products. The above decision has made the business stand in front of survival. Normally, the company exports from 2.5 to 3 thousand tons of honey each year, but from now until the end of the year, the company's exports are only expected to be about 500 tons. Meanwhile, up to 80% of enterprises' goods are to serve the export market. The honey bee industry units in the area are also struggling According to Mr. Nhan, the difficulties still continue and enterprises have not found any possible solutions to overcome.


Author: Vi Quan

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