European firms upbeat about Vietnam business environment

26-Jul-2016 Intellasia | TBKTSG | 6:00 AM Print This Post

A majority of European businesses are optimistic about Vietnam’s business environment and macroeconomic stability as shown in a recent survey conducted by the European Chamber of Commerce in Vietnam (EuroCham).

EuroCham said on July 21 the Business Climate Index (BCI) reached 77 in quarter 2 based on the survey of 883 members, including some of the largest European investors in the country. The index reflected positive sentiment of EuroCham members on the business environment in Vietnam.

EuroCham said its members assessed Vietnam’s overall business situation in the previous quarter as good.

The survey found 66.7 percent of the respondents described the business situation as “excellent” and “good”, while only 12.5 percent said it was “not good” and “very poor.”

As for the business outlook, “excellent” was selected by 9.4 percent of respondents and “good” was picked by 54.2 percent.

They also hold a positive view of Vietnam’s macroeconomic outlook in the next quarter and expect that macroeconomic stability to continue, with 56.3 percent ticking the “stabilisation and improvement” option and 34.4 percent thinking that it would not change.

The survey unveiled 49 percent of respondents expected the number of orders or revenue would edge up in the next quarter and 15.6 percent hoped a significant rise in revenue.

Asked about investment and headcount development plans, 43.8 percent of them said they would increase investment while 43.7 percent planned an increase in hiring. Only 4.1 percent said they would cut staff and 50 percent would keep their payrolls unchanged. Meanwhile, 40.6 percent said their investment would be maintained at the same level for the next quarter.

EuroCham chair Michael Behrens said the results for quarter 2 indicated positive expectations of members for the near future.

“EuroCham members maintain a positive view of the Vietnamese market and their business operations in the country, a result which does not differ from our last survey. This is a good sign for the current implementation of the EU-Vietnam Free Trade Agreement, which is expected to strongly enhance European business and investment,” Behrens said.

However, EuroCham noted that the survey was conducted before the UK’s June 23 vote to leave the European Union (EU).


Category: Economy, Vietnam

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