This is the overall result of a business climate survey conducted by the European Chamber of Commerce in Vietnam (EuroCham) in April-May 2012.

The majority of the surveyed European companies are looking to maintain and increase their investments in Vietnam.   

Thirty-eight percent of respondents said they are planning to raise their investment in the country, up two percent from the previous survey. Thirty-four percent of the surveyed businesses said they want to maintain their level of investment.

Meanwhile, nearly one third of respondents (28 percent) are considering a reduction in their investment in the country, showing that they are still cautious about the outlook of the Vietnamese market.  

The survey reveals that there is an upward trend in the outlook on revenue/orders. About 58 percent of the respondents expected an increase in revenue in the medium term, a solid rise from 47 percent in the last quarter.

Fewer companies (18 percent) expected their number of orders to remain constant compared to the last quarter where this view was shared by 27 percent of respondents.  

However, up to 57 percent of respondents are still worried about inflation which they said is a major concern or even threat to their business operations in the country.  

In addition, 26 percent of respondents had a pessimistic outlook for their business in the second half of this year, and none of the respondents described their current business situation as ‘excellent’.

The surveyed European businesses also said that the minimum wage increase, starting in May, also has little effect on their operations. Up to 45 percent of respondents stated that it did not affect them at all, while 39 percent expected the impact to be ‘minor’. Only 16 percent expected a ‘major’ or ‘threatening’ impact of the pay rise.