European business confidence continues rising

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The survey, conducted by the European Chamber of Commerce in Vietnam (EuroCham), shows that the business climate index (BIC) is back to its 2011 levels-having gone from last quarter’s 59 to 66. 

This increase further underlines the commitment of European companies to the Vietnamese market, according to EuroCham.

“It  is  encouraging  to  see  the  EuroCham  Business  Climate Index  having  continued  its  upwards  flight  –  to  an  impressive  66.  A further increase by seven points seems to underline the findings of last quarter’s survey. Our members have a strong belief in the Vietnamese market and are very hopeful of a strong implementable free trade agreement,” EuroCham chairwoman Nicola Connolly.

In addition to the EU-Vietnam Free Trade Agreement, the EuroCham said European investors are also expecting on the creation of ASEAN Economic Community in 2015.

In line with the creation of an ASEAN Economic Community, the BCI  survey  also  asked  respondents  to  evaluate  Vietnam’s    competitive advantages against other ASEAN countries across a  number  of  different  criteria.  According  to  the  findings,  competitive  labour  cost  was  perceived  as  one  of  the  main reasons  for  EuroCham members  to  settle  their  businesses  in Vietnam. 

Compared  to  the  results of  last quarter’s BCI,  the amount of  respondents  assessing  their  current  business  situation as  positive  has  remained  relatively  stable  at  44 per cent, compared to 45 per cent last quarter and last year’s 43 per cent.

In addition, the number of respondents remain negative perception has comparably declined from 29 per cent to 21 per cent.

The business outlook has seen a continued qualification with responses having positive assessment rising above the midpoint to an impressive 57 per cent compared to last quarter 49 per cent and last year 44 per cent.

Investment  and  recruitment  plans  continue  to  improve  despite  declining expected business orders. Positive  trend of  increasing  investment plans has come back with 81 per cent of  respondents  intend  to maintain or  increase  their investment level, compare to last quarter of 78 per cent.

The positive development in expected investment plans also transfers into the recruitment plans, with the number of respondents expecting to increase their headcounts continuing to increase – from 48 per cent last  quarter  to  55 per cent  this  quarter.  Equally  important  is  the  fact  that  the  number  of  respondents  expecting  to  reduce  their  workforce has further diminished – 11 per cent compared to last quarter 15 per cent.