Results of the first quarterly EuroCham Business Climate Index, released today during a press conference in HCMC, show that business confidence and outlook among European businesses in Vietnam remains positive.
EuroCham Chairman Alain Cany speaking at a press conference held in HCMC
Among the EuroCham members that participated in the survey, business confidence was overall positive. Giving a Business Climate Index of :
The index ranges from 0 to 100 where 100 represents the highest and 0 the lowest confidence level. Midpoint or “neutral” is 50.
Solid current business situation
With 62 percent, the majority of respondents to the survey focus their activities on the local market in Vietnam. When asked about the current situation of their business, the response was largely positive, but not overwhelming. The majority of businesses assessed their current situation as ‘good’ or ‘neutral’.
Rising investment in 2011
When asked about their business outlook and investment plans 2011, the predictions were very positive. 70 percent of respondents listed their outlook as ‘good’ or ‘excellent’ with 18 percent having a neutral view and 12 percent giving a negative response. As far as investment plans were concerned. The vast majority of companies in the survey planned to increase their investment in Vietnam by ‘a little bit’ (45%) or ‘significantly’ (23%) or maintain their current level of investment (18%). Only a very small minority planned to reduce their investment in Vietnam in the coming year.
Steady or slightly increased recruitment;
When asked about their recruitment plans, most respondents indicated that they expect their workforce to remain the same (37%) or rise by up to 20% (31%). 18 percent of respondents indicated a significant increase in recruitment over 20% and only a small minority planned to reduce the size of their company in 2011. Most companies expect the salaries for both skilled and unskilled labour to rise by 5-10% in the coming year.
Businesses forecast Vietnam GDP growth of 6-8% and are very optimistic about their own sector.
60 percent of businesses in the survey responded that they expect Vietnams’ GDP to grow by 6-8% in 2011 showing an overall confidence in further economic development of Vietnam. When asked about the expected growth of their own business sector, respondents showed considerable optimism with the majority (42%) indicating that they expect their sector to grow by more than 8% next year.
High inflation rate expected
Most European businesses (50%) in the survey expect inflation in Vietnam to reach up to 10% with 39 percent of respondents answering they see inflation reaching 10-15% in 2011. Accordingly, most businesses responded that they expect about 5-10% depreciation of the VND against both Euro and USD.
Please refer to the documents below for further details.
- Press Release
- Business Climate Index Overview
- Detailed 3rd Quarter 2010 Survey Results
- Article on Saigon Times Daily published on Thursday, 28 October 2010
For enquiries about the EuroCham Business Climate Index, please contact:
Mr. Jan Wiehler
EuroCham Marketing& Services Manager
Tel.: (84-8) 3827 2715 Fax: (84-8) 3827 2743