German businesses remain upbeat about Vietnam

According to the results, 81 per cent of surveyed businesses are positive about and satisfied with their current operations. Half expect to see growth, while 35 per cent plan to increase local investments, showing an increase over the 24 per cent seen in spring. 35 per cent anticipate economic growth in Vietnam over the next 12 months, while 54 per cent are confident about Vietnam’s steady pace. Furthermore, 54 per cent of respondents intend to maintain their workforce over the next 12 months, while 35 per cent plan to hire new employees.

German investment in Vietnam reached new heights this year, reflecting a strong and growing partnership between the two nations. With over 530 German companies actively operating in Vietnam, the country remains a key market for Germany's global expansion strategies.

German enterprises have invested an impressive $3.6 billion, showcasing their confidence in Vietnam's economic potential. These investments span diverse sectors, including manufacturing, advanced technology, logistics, and the rapidly growing renewable energy industry, underscoring Vietnam's pivotal role in supporting sustainable and innovative growth.

In Europe, the economic outlook is underwhelming. Although German companies operating internationally remain optimistic about the future, they still remain cautious due to these global economic fluctuations.

These businesses have identified several key challenges stemming from this volatile environment. Chief among these are subdued global demand (60 per cent), economic policy uncertainties (30 per cent), and infrastructure constraints (27 per cent). Other pressing issues include trade barriers (24 per cent), increasing labour costs (22 per cent), legal uncertainties (22 per cent), and ongoing supply chain disruptions (22 per cent), all of which influence the strategic priorities of German businesses, including those in Vietnam.

Additionally, German companies are defining factors influencing their competitiveness in the Vietnamese market. The biggest influences include the rising cost of preliminary products (47 per cent), intense local competition (33 per cent), and competition from third-market players (26 per cent). These factors further underscore the complex landscape that firms must navigate to sustain growth and remain competitive globally.

Despite the challenges, German businesses see significant growth potential in Vietnam's promising market. Over half (53 per cent) of surveyed firms have noted a positive competitive position over the past five years. Vietnam’s steady economic growth and strategic role as a manufacturing and export hub offer German companies a stable alternative amid global uncertainties, enabling supply chain diversification and risk mitigation.

The country’s focus on renewable energy and sustainability aligns with Germany’s strengths in green technologies, presenting vast opportunities for innovation and collaboration. A strong and growing German business community in Vietnam further underscores the potential for partnerships and joint ventures. By addressing challenges like infrastructure gaps and local competition, German firms can strengthen their presence in Vietnam and leverage their dynamic economic landscape to achieve sustainable growth.

The AHK World Business Outlook is based on an annual survey by the German Chambers of Commerce and Industry, involving members of the German Chamber of Commerce Abroad, delegations, and representative offices. This most recent survey was taken between September 23 to October 16, gathering responses from almost 3,500 companies worldwide.

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