Business confidence and outlook among European businesses operating in
Vietnam is improving slightly, according to the European Chamber of Commerce in
Vietnam (EuroCham).
The EuroCham Business Climate
Index survey released on March 7 showed that the Business Confidence Index (BCI)
for Vietnam in the first quarter of 2013 increased from a record low of 45 in
the previous quarter to 48 points.
The businesses participating in
the survey are active in the services industry, manufacturing, trading and
other activities.
However, the Index remained below
the half-line, which raised concerns among entrepreneurs about their current
business situation and outlooks as well as the impact of increased tax, fines
and official scrutiny.
The survey saw an increase in
respondents assessing their current business situation as positive from 26 per
cent to 40 per cent. With respondents holding a neutral view remaining fairly
stable at 36 per cent, there were still a quarter of respondents holding a
negative view of their current business situation.
At the same time, the reported
investment plans seem to be stabilising. About 73 per cent of respondents said
they expect to keep their investment at similar levels to 2012, or to increase
investment slightly. Up to 78 per cent reported that they are maintaining or
increasing their investment, indicating a continued faith in Vietnam’s medium
term future.
Besides, 68 per cent of
respondents expect to either maintain or decrease headcount, compared with 56
per cent in the last quarter. Only 29 per cent expect to increase the number of
employees compared with 40 per cent in the last survey. These figures show that
businesses are looking for efficiency and trying to maintain flexibility by
keeping their fixed costs as low as possible, especially in an uncertain
environment.
Commenting on the survey,
EuroCham Chairman Preben Hjortlund said that it is encouraging to see
EuroCham’s BCI increase slightly, which reflects perceived stabilisation in the
macroeconomics.
However, the index is still the
wrong side of 50 and is down on the 79 level achieved two years ago, which
requires the Government’s continued efforts to improve the underlying
structural problems of the economy, he added.
QDND
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