European businesses have higher confidence in Vietnam market: survey
European businesses have higher confidence in Vietnam market: survey
European businesses operating in Vietnam are displaying resilience, evident in the Business Confidence Index (BCI) released by the European Chamber of Commerce in Vietnam (EuroCham) on Monday.
This illustration image shows workers working at a foreign-invested enterprise at Tan Thuan Export Processing Zone in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre |
The index reached 46.3 in the fourth quarter of 2023, indicating an increase from the preceding quarter's level of 45.1.
This uptick signals gradual stabilization, according to a survey conducted by Decision Lab, with the participation of over 1,400 EuroCham members across various sectors.
However, it is vital to highlight that the BCI has remained below the midpoint since the fourth quarter of 2022.
Notably, over one-third of the businesses anticipate underperformance, underlining a cautious outlook amid persistent market weaknesses.
“There's definitely a positive trend underway. While we still have a long way to go for a full recovery, businesses are feeling more hopeful,” said EuroCham chairman Gabor Fluit.
“The European business community is increasingly optimistic that the most challenging economic period is now behind us."
The quarterly BCI offers a snapshot of European investor sentiment in Vietnam.
Compared to the third quarter of 2023, there was a slight two-percentage-point dip in overall optimism for economic stability and growth in the fourth quarter, but this was more than offset by a drop of 14 percentage points in expectations of an economic downturn.
The last quarter of 2023 saw a marked increase in satisfaction among businesses.
In particular, firms confident in their current situation rose from 24 percent in the third quarter to 32 percent in the fourth quarter.
Furthermore, the outlook for the first quarter of 2024 is also positive, with 29 percent of the businesses viewing their prospects as 'excellent' or 'good' – a sign of diminishing concerns, as extreme worries fell from nine percent to five percent.
Vietnam's business sector is poised for growth as 31 percent of the companies plan to expand their workforce in the first quarter of this year, and 34 percent intend to intensify their investments, a clear uptick from 2023.
These statistics signal a strong momentum for growth and opportunity as Vietnam begins 2024.
With regard to the investment realm, the Southeast Asian nation’s investment hotspot status increased significantly in the fourth quarter of 2023.
An impressive 62 percent of those surveyed ranked Vietnam among their top ten global investment destinations, with 17 percent placing it at the very top.
This strong endorsement is matched by 53 percent of the respondents anticipating enhanced foreign direct investment in Vietnam by the end of the fourth quarter of 2023.
The survey also highlights Vietnam's strategic position in the ASEAN region.
While only a small fraction, or two percent, consider it an 'industry leader,' a noteworthy 29 percent rank it among the 'top competitive countries' in ASEAN.
The majority, 45 percent, view Vietnam as a competitor, albeit acknowledging certain challenges.
This perspective emphasizes Vietnam's growing influence and potential for further advancement within the ASEAN economic landscape.
“Vietnam's long-term economic trajectory suggests a promising path of continued growth," said Decision Lab CEO Thue Quist Thomasen.
"In the short and medium term, the nation is showing its trademark ability to deliver a stable business climate even in turbulent times, as we observe the fifth quarterly measurement within the range of 40 to 50 index points.
“Continued stability and potential improvement in 2024 will underpin the case for further foreign direct investments in the country."
