New data from the Business Climate Index (BCI) of the European Chamber of Commerce in Vietnam (EuroCham) shows that European companies are more positive about doing business in Vietnam.
This growing confidence in Vietnam’s trade and investment environment can be seen in a six-point jump from the first to the second quarter of this year. The latest BCI results show that the sentiment of European business is at its strongest for 18 months, and just two points below the all-time high of the third quarter of 2016.
EuroCham members also reported an optimistic outlook on a range of issues, from their own investment and profit projections to workforce levels and Vietnam’s macroeconomic outlook.
Over 70 per cent reported a positive situation for their enterprises in the last quarter, with 62 per cent describing it as ‘Good’ and 12 per cent as ‘Excellent’. Looking ahead to the next quarter, 64 per cent believe their business situation will be ‘Good’ with a further 15 per cent answering ‘Excellent’.
According to EuroCham, this implies that Vietnam’s overall business environment has been considerably improving, posing more opportunities for business growth and development. The positivity can also be derived from improvements in internal factors, such as human factors, management processes, and company culture.
EuroCham members are also optimistic about Vietnam’s macroeconomic outlook, with 57 per cent predicting ‘Stabilisation and Improvement’ in the next quarter and 34 per cent believing that it will remain static, compared to just 10 per cent anticipating a ‘Deterioration’.
Meanwhile, over half believe that their business will see either a ‘Significant’ or ‘Moderate’ increase in staff in the next quarter, with a similar proportion (61 per cent) anticipating either a ‘Significant’ or ‘Moderate’ increase in investment. Over three-quarters of EuroCham members believe that their orders or revenue will see a ‘Significant’ or ‘Moderate’ increase in the third quarter.
For the first time, EuroCham asked its members for their views on Corporate Social Responsibility (CSR). Just under nine out of ten responded that CSR is important to their business operations in Vietnam. The main motivations for CSR include ‘Brand Reputation’ and ‘Customer/Environmental Concern’.
“These results show once again that European companies and investors remain confident in Vietnam. The fact that EuroCham has now reached over 1,000 members – making us one of the largest foreign business associations in Asia – reinforces this positive message and shows that Vietnam is open for business as an attractive trade and investment destination," said Nicolas Audier, Co-Chairman of EuroCham.
“Our data also shows that European companies are sustainable as well as successful. The fact that almost 90 percent of our members believe CSR is important to their business operations underlines their long-term commitment to Vietnam and its people," he added.
According to Nicolas Audier, these results come at an important time for EU-Vietnam relations; the EU-Vietnam Free Trade Agreement should be ratified soon.
"On the cusp of this historic deal, which would boost trade and investment on both sides, we hope this positive message from EuroCham and its members will inspire the Government to continue opening its markets to foreign investment and improving its trade and investment environment,” said EuroCham Co-Chairman.