The 12th quarterly EuroCham Business Climate Index survey released on August 27 shows that business confidence and outlook among European businesses in Vietnam remain unchanged from the last mark at around the 50 percent.
But EuroCham members who participated in the survey expressed increasing concern about their current business situation and fear of increased inflation levels as well as the overall macroeconomic outlook in Vietnam .
The survey also found that in the last six months, around a fifth of the respondents considered shifting to another ASEAN market.
More than half of the businesses polled are active in the services industry, a quarter in manufacturing, and the rest in trading and other activities.
The Business Climate Index, which turned around in the last two quarters, now remains stuck at the mid-point.
This is largely due to the reduction in the number of respondents assessing their current business situation as positive – from 43 percent to 38 percent – and increase in respondents having a negative view.
But, looking to the future, the business outlook has seen continued improvement with respondents having positive expectations, rising to 51 percent from 43 percent last quarter and 30 percent the previous quarter.
This is a clear demonstration of the fact that EuroCham members are committed to Vietnam in the long term.
However, investment plans are decreasing with the number of respondents expecting to raise investments in Vietnam decreasing from 42 percent to 34 percent.
The number of companies intending to "significantly increase investment" has returned to the levels of the first quarter of 8 percent from last quarter's 13 percent and 20 percent one year ago.
In addition, there has also been a slight increase in members expecting to pare their investments in Vietnam from 19 percent last quarter to 21 percent.
When asked about their expected number of orders and revenues in the medium term the answers have continued their positive trend.
While the share of companies expecting a drop in revenue remains at 17 percent, the number of respondents expecting it to increase has further improved from 53 percent to 61 percent, a significant improvement and a return to the same level as a year ago. Medium-term orders, hiring plans were stable.
But the positive development in revenues has not translated into increased recruitment plans, with the number of respondents expecting to raise hiring being roughly the same as those expecting to decrease.
Concerns about inflation have returned, with 43 percent of respondents finding that inflation could have a significant impact on or even threaten their business.
But this is still a slight improvement from last year's 49 percent.
Members were also asked to indicate what they think the rate of inflation will be, and the average polled was 5.94 percent.
This represents a noticeable difference from last quarter's estimate of 5.13 percent.
Last quarter, only 48 percent of respondents expected a deterioration in the macroeconomic environment. This quarter, respondents' appreciation of the economic situation has taken a turn for the worse, with a majority of them (60 percent) now expecting the environment to further deteriorate.-VNA
But EuroCham members who participated in the survey expressed increasing concern about their current business situation and fear of increased inflation levels as well as the overall macroeconomic outlook in Vietnam .
The survey also found that in the last six months, around a fifth of the respondents considered shifting to another ASEAN market.
More than half of the businesses polled are active in the services industry, a quarter in manufacturing, and the rest in trading and other activities.
The Business Climate Index, which turned around in the last two quarters, now remains stuck at the mid-point.
This is largely due to the reduction in the number of respondents assessing their current business situation as positive – from 43 percent to 38 percent – and increase in respondents having a negative view.
But, looking to the future, the business outlook has seen continued improvement with respondents having positive expectations, rising to 51 percent from 43 percent last quarter and 30 percent the previous quarter.
This is a clear demonstration of the fact that EuroCham members are committed to Vietnam in the long term.
However, investment plans are decreasing with the number of respondents expecting to raise investments in Vietnam decreasing from 42 percent to 34 percent.
The number of companies intending to "significantly increase investment" has returned to the levels of the first quarter of 8 percent from last quarter's 13 percent and 20 percent one year ago.
In addition, there has also been a slight increase in members expecting to pare their investments in Vietnam from 19 percent last quarter to 21 percent.
When asked about their expected number of orders and revenues in the medium term the answers have continued their positive trend.
While the share of companies expecting a drop in revenue remains at 17 percent, the number of respondents expecting it to increase has further improved from 53 percent to 61 percent, a significant improvement and a return to the same level as a year ago. Medium-term orders, hiring plans were stable.
But the positive development in revenues has not translated into increased recruitment plans, with the number of respondents expecting to raise hiring being roughly the same as those expecting to decrease.
Concerns about inflation have returned, with 43 percent of respondents finding that inflation could have a significant impact on or even threaten their business.
But this is still a slight improvement from last year's 49 percent.
Members were also asked to indicate what they think the rate of inflation will be, and the average polled was 5.94 percent.
This represents a noticeable difference from last quarter's estimate of 5.13 percent.
Last quarter, only 48 percent of respondents expected a deterioration in the macroeconomic environment. This quarter, respondents' appreciation of the economic situation has taken a turn for the worse, with a majority of them (60 percent) now expecting the environment to further deteriorate.-VNA
