Vietnam - Concerns remain among business leaders for 2012

Corporate outlook remains optimistic for 2012 overall, but more companies are concerned that their situation will further deteriorate compared to previous years, according to Nielsen Vietnam.

The online Nielsen Business Barometer survey – conducted during the last two months of 2011 – was recently released. It found that 29 percent of firms believed their situation would improve significantly, while 36 percent expected conditions to remain the same and 28 percent estimated the situation would deteriorate in the next 6-12 months.

Two-thirds of business leaders still expect double-digit growth in the next 12 months. Compared to the last wave, more companies expect single-digit growth, according to the survey report.

Among the three key factors companies believed were required for growth in the next 12 months, the survey pointed out that "while increasing consumption and expansion still remain a source for growth, business leaders now talk about mergers and acquisitions (M&A) and exports too."

"Leaders will continue to invest in advertising and expanding businesses in 2012, but will do so with even more caution than in past years," stated the report. Business leaders expect Vietnamese consumers to continue to make purchases when there are promotions, but also to cut back on ‘non-essential' items.

In the next 12-18 months, the rural market was predicted to continue to attract business leaders, though to a lesser extent than the first half of 2011.

The survey also asked questions on business leaders' opinions and consumer reactions on 2011. About two-thirds of the leaders felt business conditions in Vietnam had deteriorated, yet most achieved their targets. However, significantly fewer companies beat their targets in 2011 compared to 2010.

Among the five top concerns, global economic crisis showed up for the first time. The lingering instability in Europe, North America and the growth challenges facing Vietnam brought back a cautious outlook among business leaders and consumers.

Inflation remained a top burning concern among businesses, with more than 59 percent of business leaders worried about it.

Competitive pressure, the dong devaluation and wage growth were also listed among the top concerns of business leaders with 41, 41 and 24 percent expressing worries, respectively.

Leaders recognised that consumers were becoming more discriminating and had an allotment of choices. Therefore, price increases must be carefully planned. Furthermore, more than half of those surveyed said they would look at improving productivity as a solution to inflation.

VNA

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