Business confidence and outlook among European businesses operating in
Vietnam is improving slightly, according to the European Chamber of
Commerce in Vietnam (EuroCham).
The EuroCham
Business Climate Index survey released on March 7 showed that the
Business Confidence Index (BCI) for Vietnam in the first quarter of
2013 increased from a record low of 45 in the previous quarter to 48
points.
The businesses participating in the survey
are active in the services industry, manufacturing, trading and other
activities.
However, the Index remained below the
half-line, which raised concerns among entrepreneurs about their current
business situation and outlooks as well as the impact of increased tax,
fines and official scrutiny.
The survey saw an
increase in respondents assessing their current business situation as
positive from 26 percent to 40 percent. With respondents holding a
neutral view remaining fairly stable at 36 percent, there were still a
quarter of respondents holding a negative view of their current business
situation.
At the same time, the reported
investment plans seem to be stabilising. About 73 percent of respondents
said they expect to keep their investment at similar levels to 2012, or
to increase investment slightly. Up to 78 percent reported that they
are maintaining or increasing their investment, indicating a continued
faith in Vietnam ’s medium term future.
Besides,
68 percent of respondents expect to either maintain or decrease
headcount, compared with 56 percent in the last quarter. Only 29 percent
expect to increase the number of employees compared with 40 percent in
the last survey. These figures show that businesses are looking for
efficiency and trying to maintain flexibility by keeping their fixed
costs as low as possible, especially in an uncertain environment.
Commenting on the survey, EuroCham Chairman Preben Hjortlund said that
it is encouraging to see EuroCham’s BCI increase slightly, which
reflects perceived stabilisation in the macroeconomics.
However, the index is still the wrong side of 50 and is down on the 79
level achieved two years ago, which requires the Government’s continued
efforts to improve the underlying structural problems of the economy,
he added.-VNA