Vietnam’s wood industry’s exports fall below expectations as Q2 2023 figures to the United States have yet to yield positive results. Despite taking over China’s spot as the number one wood furniture exporter to the United States in 2022, Vietnam’s export figure for wood and wood products continue to sharply drop with $584 million in April 2023, suffering a drop of 37,6% compared to April 2022. As Vietnam’s flagship wood product to the US, wood furniture takes up a total of 89,2% of all wood exports, achieving $1,24 billion but still 41,9% lower compared to the same quarter from 2022.
Many attribute this sudden decrease to America’s rising inflation, decreasing overall demand for wood and wood products alike. Most Vietnamese wood products imported into the US are recorded to have a low consumption rate throughout March 2023. To make matters worse, US banks are limiting loans given out to businesses looking to import in large quantities, further reducing the amounts of orders placed from Vietnam. These are counted amongst a number of issues that have long plagued the US housing market. Contributing to the rising mortgage rate that is stopping many Americans from buying a house, thus lowering demand for furniture. Although experts are suggesting that housing market activity will seize up. If this continues, then sellers will be forced to reduce their asking prices due to a lower amount of sales.
China also returns to the fray after the country finally lifts its “draconian” Zero Covid policy. Though it still struggles with new outbreaks of the virus, China’s export to the US increases by 13% in this year compared to the same period in 2022. This can potentially allow China to edge Vietnam out of some of their market share in the States. Furthermore, Vietnamese goods also face troubles from inside the market itself. Imported wood products from Vietnam in the US are currently under investigation for anti-dumping charges and clarification as the government is adamant to keep out wood of Russian origin looking to circumvent sanctions.
While it’s unclear whether or not Vietnam’s wood export figures to the US would improve for the rest of the year. As of the second quarter, 2023, export numbers are still expected to continually fall. Although this is unlikely to lead to a collapse of Vietnamese efforts to maintain its lead in the market as the Vietnamese wood industry and furniture industry see the US as one of the most opportune markets out there and will no doubt, try their best to adapt to the shifting tides.
