According to US media reports, orders for Vietnam's furniture manufacturing industry fell to the lowest level in 13 months in October, and the shutdown period for the Lunar New Year may be extended.
Some U.S. furniture importers said supply factories would be closed for the holiday starting Jan. 22. The exact timing of the end is uncertain, but some businesses believe it could be more than a month.
"Our main supply factories will be closed for about 10 days, which is certainly manageable for our operations," said Hana Hajar, vice president of operations and supply chain at furniture importer BDI.
"But our concern is with other sub-suppliers, who are expected to be out of work for longer," he continued. “We are following this situation closely with the help of intermediary agents. As of now, having done some forward planning, we do not expect any major delays in supply cuts. We do not expect any major delays in the middle of the second quarter of 2023. The new bedroom collection will arrive as scheduled.”
Martin Furniture sources from multiple Vietnamese factories, making supply more difficult to predict.
Vietnam's furniture orders fall to lowest in a year in October, New Year's shutdown may be extended
"We work with a dozen different factories, each with a different situation," said Pat Hayes, vice president of brand imports. “I’m currently working through their proposed timeline for the shutdown of factories. It seems like the big factories will be shut down for two weeks, the rest of the factories will be shut down for maybe the first week of January to February. It depends on how many orders they get by December. ."
The vice president wasn't too worried, he thought as long as the company planned well, it shouldn't have much impact.
"It really has no impact on us because we are in close communication with the factories to understand their production plans. We have been looking at their shutdown plans and have increased our orders to prepare for that period."
Several other importers said they had heard about the extended shutdown but did not have enough confidence to make a forecast. The consensus seems to be that the shutdown period will be extended, although it is less certain how long.
Some Vietnamese media issued ominous warnings about the uncertainty of the order. Factories are preparing for the worst as orders from the U.S. and Europe plummet, according to VnExpress. One factory has laid off more than 1,100 workers.
The S&P Global Vietnam Manufacturing Index, which measures Vietnam's manufacturing output, recorded a 13-month low in October, meaning manufacturing orders fell to the lowest level.
S&P economics director Andrew Harker said: "While signs of a return to growth in new orders and the waning impact of the Covid-19 pandemic mean manufacturers are expecting output to keep rising over the coming year, concerns remain around weakening demand and consumption. Confidence in the market also fell to a one-year low.”