Vietnam - Labour market faces hard work

The labour market is rough around the edges amid economic uncertainty.

Small- and Medium-sized Enterprise Association statistics show that over 20 per cent out of more than 500,000 small- and medium-sized enterprises (SMEs) across the country were dissolved and another 60 per cent of SMEs saw sagging revenue and had to lay off workers in the year to date.

Difficulties are particularly critical in labour intensive sectors such as the textile and garment industry. The salary hike, which started from October 1, sees enterprises’ payrolls augmenting by 30-40 per cent, plus a 15 per cent power price hike in early 2011 while transport costs were up 20 per cent, treated waste-water costs up 30 per cent. These factors have driven total input expenses up by over 20 per cent.

In the meantime, export orders nosedived 50-60 per cent and export prices lost 5-10 per cent.

Construction firms are in the same position. Escalating material costs caused delays to construction works and made thousands of labourers jobless.

In the wood sector, a survey by Vietnam Academy of Social Sciences’ Centre for Analysis and Forecast showed that sector businesses shed 30 per cent in size against the same period in 2010. Meanwhile, financial expenses such as borrowing costs and material costs hiked 25 per cent. Total expenses were up 30 per cent if salary hike was included where export orders just rose 5 per cent in value, making scores of firms shut up shop to avoid losses.

The situation was no better in traditional craft villages. By August 2011 the work volume and labourers’ incomes in craft villages dropped 60-70 per cent against 2010. Revenue figures for southern craft villages making handicrafts for export were down 50 per cent.

Similarly, many northern production workshops were out of work three months in the first eight months to reduce rising inventories.

VIR

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