Workers make garment at a factory in Vietnam (Illustrative photo: VNA) HCM City (VNA) –Leaders of European businesses in Vietnam were more positive about their firms’performance in the third quarter of 2020, according to the Q3 Business ClimateIndex (BCI) released by the European Chamber of Commerce (EuroCham).
The index, conducted by YouGov Vietnam,rebounded in Q3, jumping 24 points to reach 57.5 – the highest score since theoutbreak of the global COVID-19 pandemic.
In Q1, when COVID-19 first hit internationaltrade and investment, the BCI fell to 26 points. It saw a slight increase in Q2as Vietnam became one of the global success stories of the pandemic.
Now, with businesses able to operate with farfewer restrictions and the EU-Vietnam Free Trade Agreement (EVFTA) enteringinto force on August 1, the confidence of European business leaders has seen astrong resurgence, according to EuroCham.
Business leaders were more positive about theirown enterprise in Q3, with 40 percent describing their performance as either“Excellent” or “Good” – more than double the 18 percent recorded in theprevious three-month period.
EuroCham said Q4 looks to be even morepromising, with 44 percent predicting a strong end to 2020. Meanwhile, most companiesare anticipating stabilisation in their headcount (65 percent) and investmentplans (57 percent), with just under half (44 percent) expecting to see anincrease in their revenue and orders.
With the EVFTA entering into force in Q3, theBCI also asked EuroCham members about its impact on their business andinvestment plans. One-third said that the agreement was an important part oftheir decision to invest in Vietnam, with the top two factors predicted todrive growth being tariff reductions and greater market access for investors.
Chairman of EuroCham Nicolas Audier said: “Despitea difficult 2020 for international trade, our data shows that Vietnam’s swiftand effective response to the global pandemic has paid dividends. Europeanbusiness leaders feel more positive both about their own enterprises andVietnam’s trade and investment environment, and report a sense of cautiousoptimism going into Quarter Four.”
“The implementation of the EU-Vietnam Free TradeAgreement in August has, no doubt, helped to boost this growing confidence. Ourdata shows that falling tariffs and growing market access are important to ourmembers, and will help to spur new foreign-direct investment from the EU in thefuture,” he added.
The BCI is a regular barometer of EuroChammembers and their perceptions of the trade and investment environment. Eachquarter, it tracks the performance of EuroCham’s member companies and theirperceptions of the economic outlook in Vietnam./.
VNA
