European businesses confident about future of Vietnamese market

Attendees at the opening ceremony of the European Union – Vietnam Business Network in Ho Chi Minh in November 2013

The European Chamber of Commerce in Vietnam, or EuroCham, is an independent, not-for-profit organization that serves as the principle voice of more than 850 European businesses in Vietnam.

The Business Climate Index (BCI) demonstrates results of EuroCham’s quarterly survey on business sentiment among European companies operating in Vietnam through assessments provided by representatives of its member companies.

Overall, the index for the third quarter of 2016 is 86, a ten-point increase from the previous quarter.

Over 71 percent of survey respondents described their current business situation as ‘excellent’ or ‘good’, while only 5.5 percent classified the present state of the market as ‘not good’. No responses described Vietnam’s business conditions as ‘very poor’.

A positive self-perception of the business outlook in the upcoming quarter for surveyed enterprises is also indicated in the results, with 16.5 percent of responses being ‘excellent’ and 64.2 percent ‘good’. Less than three percent of responses were negative.

In regards to the macroeconomic outlook for Vietnam in the next quarter, EuroCham members are confident that macroeconomic stability is likely to continue, as demonstrated in survey results.

Almost 60 percent of respondents expect ‘stabilization and improvement’, while only 4.6 percent predict deterioration in the quarter ahead.

The number of respondents that expect no change in the country’s macroeconomic outlook increased 3.2 percent from the last quarter and is now close to the 40-percent mark.

Most responding businesses intend to maintain their level of investment in the country, with this group representing roughly 41 percent of the total.

However, those who intend to increase their investment are not far behind, with 39 percent willing to invest more, and 17 percent planning to invest significantly more, the results showed.

Businesses planning to divest were marginal, with less than one percent stating their intention to do so, a marked drop from seven percent in the last quarter.

“[The results] show positive expectations for the near future and consistent satisfaction with the present situation,” EuroCham Chairman Michael Behrens commented.

“EuroCham members maintain a positive view of the Vietnamese market and their business operations in the country, a result which does not differ from our last survey. This is a good sign for the current implementation of the EU-Vietnam Free Trade Agreement, which is expected to strongly enhance European business and investment,” the chairman said.