The United States remains the largest export market for Vietnam’s wood and wood products. However, rising inflation in the U.S. has started to negatively affect the purchasing power of consumers and create uncertainty for Vietnam’s wood industry.
Export Growth Slows After a Strong Start to the Year
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Vietnam’s wood exports experienced strong growth in early 2022. In January, exports of wood and wooden products reached USD 1.55 billion, up 14.3% year-on-year.
Except for February (due to the Lunar New Year holiday), monthly exports between March and May 2022 consistently ranged between USD 1.3 and 1.6 billion. As a result, in the first five months, exports totaled nearly USD 7 billion, a 4.6% increase over the same period last year.
However, recent data shows a downward trend. In May 2022, export value dropped to USD 1.38 billion, down 4.1%from May 2021. In the first half of June, exports were USD 661 million, USD 100 million lower than the same period last year.
U.S. Inflation Dampens Consumer Demand
According to the Import-Export Department (Ministry of Industry and Trade), the slowdown in exports is mainly caused by rising inflation across major markets, especially the United States and the EU, which is forcing consumers to cut back on spending.
Additionally, high freight rates, rising input material costs, and supply chain disruptions caused by the Russia–Ukraine conflict, China’s Zero-COVID policy, and global inflationary pressures have further strained production and exports.
Mr. Nguyen Chanh Phuong, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), noted that although the first half of 2022 still saw healthy export figures, many wood enterprises are now facing declining orders, particularly from the U.S. market.
Vietnam’s exported wooden furniture is mostly affordable, mass-market products, which account for 70–80% of total export value. As inflation bites, middle- and low-income U.S. consumers—the main buyers of these products—are tightening their budgets, causing a sharp drop in demand for low-priced furniture.
In contrast, high-end furniture exports have remained relatively stable.
U.S. Market Dominance Poses Risks for Vietnam’s Wood Industry
The U.S. accounts for about 60% of Vietnam’s total wood export value. Therefore, the ongoing inflationary surge in this market is directly impacting Vietnam’s wood sector, as many U.S. importers have slowed or reduced orders.
Other key markets, such as the EU and South Korea, are also showing signs of reduced demand due to inflationary pressures.
While exports to smaller markets have increased, their total value remains too modest to compensate for the decline in the U.S. and EU.
Wood Pellets and Chips Rising—but Not Enough to Offset Furniture Decline
According to experts, while exports of wood pellets and chips are growing strongly—driven by energy demand—these categories still account for a small share compared to furniture, which dominates Vietnam’s total wood export revenue.
Therefore, this growth cannot offset the decline in furniture exports.
Given these challenges, analysts remain cautious about 2022’s full-year outlook. Thanks to the strong performance in early 2022, total exports may still match or slightly exceed 2021 levels, but the second half of the year is expected to be much slower.
As inflation continues to squeeze global demand, Vietnamese wood exporters are now re-evaluating their production and order strategies to optimize operations, retain key buyers, and maintain export momentum amid uncertain economic conditions.