European businesses' confidence reaches second highest result

New data from EuroCham’s Business Climate Index (BCI) collected from the survey of over 200 representatives of EuroCham member companies has revealed that European business leaders remain positive about doing business in Vietnam, covering the third quarter of 2018.

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 of 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 eight 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 ‘Stabilisation 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 detail 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’ and a further 8.4 per cent predicting a ‘Significant’ increase. Meanwhile, less than eight per cent believe that their headcount will fall.

Likewise, over half 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 six 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.

“The results of EuroCham’s latest Business Climate Index are another vote of confidence in Vietnam’s trade and investment environment. Our members continue to report positive signals across the board, from increasing their investment to grow their workforce," said Co-Chairman of EuroCham Nicolas Audier.