Business confidence grows after economic recovery in Q2

The Vietnam’s Business Confidence Index (BCI) in the second quarter of this year rose seven points over the previous quarter.

  • Vietnam business confidence drops
  • Business confidence falters in first quarter
  • According to a survey conducted by World Vest Base Financial Intelligence Services Company Vietnam (WVB FISL), the index was 20 points higher than the third quarter in 2008 when it was first compiled, showing that the country’s business community has confidence in the country's economic recovery.

    The survey, which was carried out from June 15 to the first week of July, covered 154 Vietnamese enterprises operating in 11 major industries who currently take the lead nationwide in terms of total assets, turnover, brands and number of employees. More than 50 percent of them are small- and medium-sized enterprises.

    It revealed that more than 44 percent of businesses said that Vietnam's economy is now healthier, almost 36 percent said it stays the same and more than 20 percent said it is now worse than last year.

    For the next 12 months, 71 percent of respondents said they believe it will get better, while only 3 percent are worried about further economic gloom.

    Worthy of note is that nearly 71 percent of those interviewed said that they expect to do even better in 2011, nearly 25 percent thought the economy will remain stagnant while 4.5 percent are worried that they will face tough times over the next 12 months.

    Nearly 51 percent have plans to keep their labour force intact, 35 percent said they will recruit more employees, while 14 percent said they will lay off part of their labour force.

    Most of the respondents said that the procedures they have to endure to access credit, along with inadequate tax policies, are the worst difficulties they have to face with.

    On top of that, many said that the amount of fake goods that are currently flooding the market is their greatest concern, because of their poor quality. This results in companies losing their prestige with consumers and their brands become associated with inferior products.

    As for factors that will affect business operations in the second half of this year, many respondents pointed to inflation, economic instability, difficulties in accessing capital and falling consumer demand.

    VNA/ VOV online