Local wood manufacturing activity slid into a downward spiral as new orders have dropped between 50 percent and 60 percent since the beginning of the year, the report said.
Vietnamese manufacturers are having few export orders left, only until the middle of the year, and most of them are small, said Do Xuan Lap, chairman of the Vietnam Timber and Forest Products Association, adding buyers, especially those in the United States, have refrained from placing new orders on high stockpiles.
Vietnam's exports of wood products to key markets of the United States, Japan, South Korea, and China fell sharply during the January-April period.
Exports to the United States slumped 38 percent to 2.02 billion dollars for the period over a year earlier, shipments to South Korea tumbled 22 percent to 274 million dollars, and exports to Japan fell 1.5 percent to 556 million dollars.
Industry experts attributed the slowdown in exports of wood and wooden goods to rising inflation in major markets, resulting in sluggish demand.
"The ongoing global economic uncertainty is very hard to predict," said Nguyen Liem, chairman of the Binh Duong Woodworking Association. "The market is not sending positive signals, thus it is hard for wood companies to draw up their business plans."
He added that local manufacturers have slashed their production capacity by 60 percent amid the current downturn.
The export market is forecast to stay flat until the end of 2024 with a mild recovery expected only around the beginning of the year, Liem said.
Last year, Vietnam earned over 16 billion dollars from exporting wood and wood products, 3.8 percent above the target, according to the association, despite high inflation, rising input costs, and log-jammed supply chains.
The country expects exports of wood and wood products to grow 7-9 percent this year to 18 billion dollars with a focus on wood pellets and woodchip which is forecast to reach 1 billion dollars.
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