Positive Outlook for European Companies Operating in Vietnam

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Aug. 29 – According to the EuroCham Business Climate Index survey, the business outlook in Vietnam remains high among a majority of European businesses operating within Vietnam.

The survey, conducted quarterly by the European Chamber of Commerce in Vietnam, found that 46 percent of respondents have a positive outlook for their enterprise in Vietnam, and an additional 6 percent rated their prospects as “excellent.”

The third quarter 2013 report, which was released this past week, sampled a variety of European companies operating in Vietnam, including service providers, manufacturers and trade specialists. Small enterprises with less than 50 employees made up the largest segment of the study’s population (40 percent of respondents), with larger companies with over 500 employees also being represented (22 percent of respondents).

The benchmark Business Climate Index, which measures business confidence, remained unchanged over the previous quarter with a neutral score of 50 – the scale’s midpoint. The scale was at its lowest in the fourth quarter of 2012, with a score of 45, and was also below the midpoint in the third quarter of 2012 and the first quarter of 2013.

According to EuroCham Chairman Preben Hjortlund, the study “further underlines the importance of Vietnam continuing and intensifying [their] efforts to improve the underlying structural problems of the economy as well as ensuring a strong and well-implemented free trade agreement.”

Furthermore, of those surveyed, 34 percent reported a neutral current business situation, 37 percent held a positive view of their current business situation and 28 percent reported unfavorable conditions.

While inflation was a major concern for most companies, 60 percent forecasted a stabilized and improving economy in the coming years. Given this assessment, a large majority of enterprises expect to maintain or increase their level of investment in Vietnam and will also look to expand their number of employees in the region.

A majority of the respondents also expect to maintain or grow their medium-term revenues in Vietnam, with 50 percent forecasting a moderate increase and 11 percent anticipating a significant increase in revenue.

Only 17 percent expect to see reduced medium-term revenues.

You can find the complete survey results here.

You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

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