Confidence among Vietnam-based European firms down slightly
Business confidence, outlook and expectations for the future among European businesses in Vietnam in the first quarter of 2015 declined slightly from the end of last year, according to the European Chamber of Commerce in Vietnam (EuroCham).
During the first quarter of 2015, the EuroCham Business Climate Index (BCI) decreased to 75 from 78 at the end of 2014.
The overall score still expresses a relatively positive perception of the current and future business environment in the market.
Participants perceiving the situation as “good” shifted from 52% in the previous quarter to 45%. Those with a “neutral” view remained largely unchanged at 31% while “very poor” conditions were reported by 2%. In contrast, the number of respondents that reported excellent conditions rose to 11%.
Macroeconomic-speaking, 63% of respondents reported “stabilisation and improvement”, a rise from last quarter’s 59%. Participants expecting the situation “not to change” also shifted from 20% to 25%.
The noticeable decline was in the number of those that expected “deterioration of the macroeconomic conditions” from 21% to 12%.
In terms of the new regulations in Vietnam’s enterprise law and investment law, 41% of the participants said they were unaware of the details of the new regulations and 21% were uninformed and unaware that there were new regulations.
Respondents expected that over the next six months, the market would see a slight reduction in inflation from 5.78% to 5.25%.
While 65% reported that they believed inflation would have a slight impact on their business, another 17% feared significant impact.
For investment plans in the medium term, the largest group remains unchanged at 41% saying they would consider increasing their investment in Vietnam “slightly”. This is followed by the second largest group at 35% expecting to “maintain” their level of investment.
The overall score still expresses a relatively positive perception of the current and future business environment in the market.
Participants perceiving the situation as “good” shifted from 52% in the previous quarter to 45%. Those with a “neutral” view remained largely unchanged at 31% while “very poor” conditions were reported by 2%. In contrast, the number of respondents that reported excellent conditions rose to 11%.
Macroeconomic-speaking, 63% of respondents reported “stabilisation and improvement”, a rise from last quarter’s 59%. Participants expecting the situation “not to change” also shifted from 20% to 25%.
The noticeable decline was in the number of those that expected “deterioration of the macroeconomic conditions” from 21% to 12%.
In terms of the new regulations in Vietnam’s enterprise law and investment law, 41% of the participants said they were unaware of the details of the new regulations and 21% were uninformed and unaware that there were new regulations.
Respondents expected that over the next six months, the market would see a slight reduction in inflation from 5.78% to 5.25%.
While 65% reported that they believed inflation would have a slight impact on their business, another 17% feared significant impact.
For investment plans in the medium term, the largest group remains unchanged at 41% saying they would consider increasing their investment in Vietnam “slightly”. This is followed by the second largest group at 35% expecting to “maintain” their level of investment.