Vietnam’s textile and garment sector recorded a total export value of approximately $18.8 billion for the first five months of 2026, marking a 5.6 per cent Y-o-Y increase. Despite the aggregate growth, the industry faces a complex operating environment characterized by weakening global demand and heightened geopolitical instability. While the export figures reflect a degree of manufacturing reliability, recent data indicates, the pace of growth remains uneven. Leading industry bodies, including the Vietnam National Textile and Garment Group (Vinatex), have noted, while order volumes for some manufacturers extend through the third quarter, the broader outlook for the final months of the year remains clouded by pricing pressures and intensifying delivery requirements from international brands.
Structural shifts and profitability pressures
The sector is currently grappling with a paradox where export volume growth masks eroding profitability. As firms transition from low-margin cut-make-trim (CMT) services toward higher-value original design manufacturing (ODM), they are confronting significantly higher operational expenses. TNG Investment and Trading JSC, for instance, reported that while revenue trends remained positive early in the year, gross profit margins faced contraction due to elevated freight costs and input price volatility. To mitigate these risks, industry leaders are aggressively pursuing digital transformation and advanced automation to enhance productivity. This strategic shift is designed to improve competitiveness against regional peers like Bangladesh and India, where labor costs remain lower, by emphasizing quality, supply chain transparency, and adherence to global sustainability standards.
Green transformation as a competitive mandate
Looking beyond short-term order fluctuations, the Vietnamese textile industry is accelerating its transition to circular production models. Major manufacturers are integrating rooftop solar power, water-recycling systems, and comprehensive carbon-footprint measurement tools to satisfy the stringent requirements of EU and North American markets. This green transformation is no longer peripheral but central to the sector’s 2026 growth strategy. As the national government shifts its foreign investment policy from volume-based attraction to high-quality, tech-integrated development, textile enterprises are aligning their capital expenditure with these ESG mandates. The long-term objective is to move beyond labor-intensive manufacturing and establish Vietnam as a sophisticated, sustainable hub for high-end global fashion and technical textiles.
A primary pillar of national economy
The Vietnamese textile and garment industry is a primary pillar of the national economy, comprising over 8,000 enterprises. It focuses on apparel, yarn, and technical textiles for global markets, primarily the US, EU, and Japan. The sector is currently transitioning toward digitalization, high-value manufacturing, and green, sustainable production.
