Covid 19 has been the focal point of the whole world during the past two years. This pandemic has put even the biggest of countries down on their knees. Fortunately, countries like Vietnam were quick to introduce precautions to stop the spread of the deadly disease in the populace. Covid-19’s effect on Vietnam’s furniture industry was still not clear in the beginning. But with the arrival of the Delta variant at the beginning of 2021, the cases have grown in the country. This resulted in a shut down of the local economy and restrictions on the export economy and much suffering among the people and businesses.
Covid-19’s effect on Vietnam’s furniture industry is undeniable.
Experts estimate that Covid 19 will cost the global economy over $4 trillion. In Vietnam, businesses have closed, and what was once a bustling local economy has tapered down. Many factories are either closed or running a severely reduced capacity.
The sentiment is the same in the furniture industry. While the furniture companies rarely welcomed customers inside their factories, they were still hit with the blanket restrictions set by the government.
Let’s try to discuss the many effects of the Covid 19 pandemic on Vietnam’s furniture industry.
Covid-19’s Effect on Vietnam’s Furniture Industry
- Personnel Shortage – The first and most obvious effect would be the shortages in workshops due to the pandemic. According to workshop owners, some of the workers who went home during the start of the pandemic never went back. This was expected by factory owners but now they are finding it hard to find people to replace them. Some shops have less than 50% of their regular workforce. As a result, workshops produce less finished products especially those who made custom-made furniture.
- Additional Expenses – Having a reduced workforce is not the end of the operational problems factories were facing. They are also forced to spend more to keep workers working safely. To ensure safety (and continuation of production), companies have to provide their workers with masks and means of disinfecting themselves and their workplace. Some workshops also opted to house their workers in in-house dormitories. This is to limit their chances of getting infected as they travel to and from work. All of these resulted in a higher overhead for companies that had to comply with health regulations to continue to operate.
- Lockdowns – Another concern for the furniture industry in Vietnam is the frequency of lockdowns. The government initiates lockdowns in certain areas to stop the spread of the virus in small spaces. In late July, the government ordered a two-week lockdown of the southern region of the country. This was made as a response to a possible spike in cases. The south part of the country is where most factories are located.
- Logistics Issues – Not only does the pandemic affect the production side of the furniture industry. It’s also beset with challenges in logistics. Due to the heavy congestion at ports and lack of containers, companies find it hard to move their finished product. What is happening in Vietnam’s ports is just a result in one way or another of the Covid pandemic. Vietnamese furniture manufacturers wishing to export their goods are currently dealing with logistics congestion, supply chain disruption for raw materials, and labor shortages due to the effect of the pandemic on global trade.
The Future of the Furniture Industry
While the current state of the furniture industry in Vietnam seems beset with the current issues affecting it, the future is brighter than it currently looks. The local government is taking all the measures to contain the virus since the beginning of the pandemic. While the country is now facing issues in vaccination due to the global shortage and an anti-Chinese vaccine sentiment, the government is optimistic they can reach herd immunity by the first year of 2022.
As for the industry itself, experts believe once the world goes into a new normal, demand for furniture will be back to normal as well. Whether or not that will be soon is still up in the air.