European companies remain positive about business environment
New data from EuroCham’s Business Climate Index (BCI) reveals that European business leaders remain positive about doing business in Vietnam. Over 200 representatives of EuroCham member companies responded to the latest BCI, covering the third quarter of 2018.
Photo: EuroCham in Vietnam
Confidence in Vietnam’s trade and investment environment, now at 81 points, is the second-highest result since the end of 2016. Despite a slight dip since the high watermark in the second quarter - the highest BCI score for 18 months - business sentiment in the third quarter remains strong.
EuroCham member enterprises continued to perform well in the last quarter, with 57 per cent describing their situation as “Good” and a further 10 per cent as “Excellent”. Meanwhile, just 8 per cent described their situation as negative. Looking ahead to the next quarter, business leaders remain optimistic, with just under 60 per cent anticipating a “Good” outlook for their enterprise, with a further 11 per cent looking forward to an “Excellent” end to 2018.
EuroCham members are also positive about Vietnam’s macroeconomic outlook, with 58 per cent predicting “Stabilization and Improvement” in the next quarter and 32 per cent believing that it will remain static. Meanwhile, less than 10 per cent of business leaders anticipate a worsening economic outlook.
The BCI dives deep into the details of the business operations of European companies, asking questions about issues from staffing and investment plans to revenue prospects for the next quarter. Over half of business leaders anticipate growing their workforce in the fourth quarter, with 41.9 per cent predicting a “Moderate” increase and a further 8.4 per cent predicting a “Significant” increase. Meanwhile, less than 8 per cent believe that their headcount will fall.
Likewise, over 50 per cent of EuroCham members believe that their business will grow its investment in the last quarter of 2018, with 40.9 per cent predicting a “Moderate” rise and 10.8 per cent predicting a “Significant” rise. Just 6 per cent foresee a reduction in their investment plan. Revenue projections are even more impressive, with over 70 per cent of business leaders anticipating either a “Significant” (15.3 per cent) or “Moderate” (56.2) rise in orders or revenue in the fourth quarter.
From the last quarter, EuroCham’s BCI is being conducted in collaboration with Decision Lab, to ensure a wider and more representative sample of respondents and more sophisticated research methods.
“The results of EuroCham’s latest BCI are another vote of confidence in Vietnam’s trade and investment environment,” said Mr. Nicolas Audier, Co-Chairman of EuroCham. “Our members continue to report positive signals across the board, from increasing their investment to growing their workforce.”
“In October, EuroCham and VCCI co-organized a high-level lunch in Brussels with the Prime Minister, bringing together almost 20 major business leaders from across Europe eager to grow their investment in Vietnam. The strong interest in this event highlights the appetite of European investors to increase their footprint in Vietnam, with the ratification of the EU-Vietnam Free Trade Agreement on the horizon. EuroCham will continue to push for the quick ratification of this historic deal and encourage more European trade and investment in Vietnam in the future.”
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