Vietnam to miss garment export target, faces labour shortage

FILE PHOTO: Labours wearing face masks work at a private factory after restrictions imposed for the past three months due to the coronavirus disease (COVID-19) pandemic were lifted, in Hanoi, Vietnam, October 1, 2021. REUTERS/Stringer/File Photo

HANOI (Reuters) - Vietnam will fall short of its garment exports target this year, by $5 billion in the worst case scenario, the government said on Tuesday, due to the impacts of coronavirus restrictions and a shortage of workers.

The country could see $34 billion of textiles exports, shy of the targeted $39 billion, plus a 35-37% shortage of factory workers the end of this year, the government said.

Vietnam is one of the world's largest garment manufacturers, supplying brands like Zara, Ralph Lauren, North Face, Lacoste and Nike, among others.

It has over 6,000 clothing and textile factories employing about three million people, government figures show.

"The last three months of this year will be an extremely difficult time for Vietnam's textile and garment industry," the government said in a statement.

"The industry may face the risk of supply chain disruption as clients move order to other countries, and labour shortage."

Vietnam has seen a mass exodus of workers since the easing of lengthy restrictions.

It had successfully contained the virus for much of the pandemic but was badly hit in May, particularly in Ho Chi Minh City, a business hub surrounded by industrialised provinces where many factories suspended work.

Nike and Adidas suppliers halted operations in Vietnam earlier this year. Nike has cut its fiscal 2022 sales expectations and warned of holiday delays, while Lululemon is moving production out of Vietnam.

Vietnam's garment exports hit $2.35 billion in September, down 18.6% against the same period last year although exports for the first nine months rose 5.8%, to $23.5 billion, official data showed.

With current vaccine coverage, factory owners expect to fully resume operations in "new normal" conditions from the second half of 2022. Less than 12% of Vietnam's 98 million people are inoculated against COVID-19, one of the lowest rates.

(Editing by Martin Petty)