Vietnam's wood industry to recover starting next year

According to the General Department of Customs, Vietnam's export of wood and wood products reached 7.2 billion USD in the first seven months of 2023. Consequently, this is a decrease of 26.4% over the same period in 2022. Despite the double-digit decline, the export of wood and wood products products is showing positive signs of recovery. Accordingly, wood exports reached 1.12 billion USD in July, an increase of 2.8% compared to June 2023. Additionally, wood exports reached 1.1 billion USD in June 2023, an increase of 3.7% compared to May 2023.

Although the export value of wood products is dropping significantly each month in comparison to the same period in 2022, the difference between every month is gradually shrinking. The export turnover of wood and wood products decreased by 21% in June 2023 compared to June 2022. Subsequently, this figure only decreased by 14.9% in July 2023 compared to July 2022.

The export turnover of wood and wood products to several major markets worldwide including the United States, Japan, Korea, Canada, etc. remained relatively low in July 2023. On the other hand, exports of wood and wood products to other markets such as China, Australia, and India grew markedly compared to June 2023 with an increase of 31.72%, 40.41%, and 51.21% respectively.

According to the Import-Export Department under the Ministry of Industry and Trade, a few businesses in the wood industry have recently resumed their reception of new orders to support the year-end furniture shopping season worldwide, which is a positive signal for the wood industry.

According to Mr. Nguyen Liem, Chairman of Binh Duong Furniture Association - the largest furniture manufacturing center in Vietnam, local wood businesses have made an effort to increase their sales by participating in domestic and international trade shows and fairs. Furthermore, they have utilized these events as an opportunity to boost trade promotion in new markets. As a result, businesses have started receiving new orders for wood products. Despite the low number and value of these orders, they allow businesses to maintain their operations and weather the market's challenging phase..

According to many entrepreneurs in the wood industry, multiple international buyers have returned to Vietnam as demand in the US and EU markets rapidly recovers, and their supplies diminish.

However, the Import-Export Department projected that the recovery of Vietnam's wood and wood product exports will stagnate in the second half of 2023. The Department purported that the global economy will continue to face numerous challenges despite slow and inconsistent signs of recovery around the world. As a result, consumer demand for wood products will also recover slowly. With these factors in mind, Vietnam's export turnover of wood and wood products is unlikely to reach the set target of 17 billion USD.

According to Mr. Nguyen Liem, the demand for wooden furniture in the global market decreased simultaneously due to the impact of inflation, economic recessions, etc. Consequently, Vietnam's total export value for wood and wood products may reach approximately 15 billion USD, which is a relatively acceptable result.

Despite the sharp decrease in demand for wood products around the world, in the long term, the market for wood and wood products will continue to grow strongly in 2024. Moreover, the United States - the largest market for Vietnam's wood industry - is experiencing a decrease in inflation levels and an increase in employment rate. Construction and real estate activities have recovered after a lengthy period of stagnated growth. It is projected that Vietnam's wood industry will experience strong recovery and growth starting from 2024. As a result, Vietnamese wood businesses are making an effort to find new orders, maintain production and export activities towards the end of the year, and prepare to boost exports starting in 2024.

“Vietnam's export turnover of wood and wood products reached 7.2 billion USD within the first seven months of 2023, which is a decrease of 26.4% compared to the same period in 2022. However, the wood production and processing industry have noticed several positive signs since July 2023. Many businesses offered solutions to find new markets and customers in order to boost revenue.

Vietnam exported over 1.1 billion USD worth of wood and wood products in July, which is 2.8% higher than Vietnam's overall export growth. This is a positive signal for general export as well as the wood industry", Mr. Liem emphasized.