The leather and footwear sector forecasts that its export earnings can reach US$18 billion this year, up more than 10% from 2016, while manufacturing index would grow by 5%.
According to experts, orders for footwear and bag processing may be perted from factories in China to those in Vietnam. The shift is attributable to China’s cut back on incentives for investment in garment and footwear sector to focus on high technology.
Another factor is the Vietnam-European Union free trade agreement which will take effect in 2018 and afford Vietnamese footwear makers more chances to boost export.
The Vietnam Leather, Footwear and Handbag Association reported that the sector raked in US$16.2 billion from export last year, up 8.8% from 2015. Of which, US$13 billion was from footwear and the remaining was from handbags and leather items, marking respective annual increases of 8.2% and 11.1%.
Footwear currently ranks fourth and suitcase-bag-briefcase ranks tenth among Vietnam’s top 10 foreign currency earners.
The sector’s manufacturing index in 2016 rose a modest 3.7% year-on-year, much lower than the 17.4% and 22% growth in 2015 and 2014, respectively, due to fluctuations in the world economic situation and falling demand, especially from the EU.