Business News

Việt Nam's footwear industry is stepping up efforts to build greener production and strengthen domestic supply chains as it seeks to maintain export growth amid global uncertainties. The sector earned nearly US$12 billion from exports in the first half of 2026. During the period, Việt Nam also overtook China to become the largest footwear supplier to the US market for the first time.

Data released by the National Statistics Office (NSO) under the Ministry of Finance on July 3 showed that the industrial and construction sector maintained solid momentum during the first six months of the year, while the services sector continued to benefit from recovering domestic consumption, tourism, and trade. Industrial value-added expanded by 9.86 per cent on-year during the period, contributing 40.35 per cent to Vietnam's overall economic growth.

The textile and garment industry generated an estimated trade surplus of nearly US$10 billion in the first six months of this year, despite weak global demand, intense price competition and continued reliance on imported raw materials. The industry is aiming to achieve its full-year export target of $48 billion. According to the Vietnam Textile and Apparel Association (VITAS), exports reached an estimated $22.2 billion in the first half, up 1.7 per cent from the previous year.

The manufacturing sector ended the first half of 2026 on a firm footing, with sustained growth in output and new orders, even as supply-chain pressures and employment weakness persisted, according to S&P Global. The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) posted 51.8 in June, down from 52.8 in May but still above the 50-point threshold, signalling a continued improvement in the health of the sector, S&P Global said in a news release on July 1.

At a time when Vietnam’s auto sector has been spending nearly US$10 billion on imported components, export competitiveness remains limited and underdeveloped, and the global economy is reshaping supply chains, the industry stands at a major turning point with clear opportunities to move toward technological and manufacturing self-reliance.

Vietnam’s manufacturing sector expanded at a faster pace in February, with the Purchasing Managers’ Index (PMI) rising to 54.3 from 52.5 in January, marking the strongest improvement in four months, according to S&P Global. The reading remained well above the 50-point threshold that separates expansion from contraction. It also extended the sector’s current growth streak to eight consecutive months, reflecting improving business conditions.

Many textile and garment firms in Việt Nam have secured production orders through the end of the first quarter of this year, but face mounting pressure from shrinking margins, rising costs and increasingly short-term contracts, industry insiders said. Market analysts said that although global demand remains relatively stable, the sector continues to struggle with higher input costs, including wages and logistics, while selling prices remain under pressure due to weak bargaining power.

Foreign-invested enterprises accounted for about 80% of footwear export revenue in 2025, as total shipments reached nearly US$29 billion, according to industry data. Export revenue of the footwear sector rose about 5% from a year earlier, data from the Vietnam Leather, Footwear and Handbag Association (Lefaso) showed.