EuroCham Business Confidence Index hits seven-year high in Q4 2025

EuroCham Business Confidence Index hits seven-year high in Q4 2025

Rising sharply by 13.5 points to 80.0, the index marks a return to strong confidence after nearly a decade of disruptions, volatility and prolonged neutrality, even as global trade tensions and geopolitical uncertainty continue to weigh on the international environment.

The DHN Tây Ninh 5 High-Tech Livestock Project in Tây Ninh Province invested by De Heus Group (Netherlands) and Hùng Nhơn Group. — VNA/VNS Photo Giang Phương

European business confidence in Việt Nam has rebounded decisively, with the European Chamber of Commerce in Việt Nam (EuroCham) on Tuesday releasing its Business Confidence Index for the fourth quarter of 2025 at its highest level in seven years.

Rising sharply by 13.5 points to 80.0, the index signals a return to strong confidence after nearly a decade marked by disruptions, volatility and prolonged neutrality, even as global trade tensions and geopolitical uncertainty continue to weigh on the international environment.

Conducted by DXL Research and Consulting, the Q4 2025 survey captures sentiment across sectors and company sizes, offering a data-driven snapshot of how European firms assess their operating environment, future prospects and investment priorities. The results point to a clear inflexion: confidence has not only recovered but moved firmly into growth territory, surpassing both pre-tariff and pre-COVID levels.

The latest reading ends a seven-year period defined by successive shocks, from the COVID-19 pandemic to global trade frictions, which repeatedly tested business sentiment despite Việt Nam’s solid economic fundamentals. It also represents one of the strongest upward movements since the BCI was launched in 2011.

In Q4 2025, 65 per cent of respondents rated their current business situation as positive, while 69 per cent expressed confidence in their outlook for the first quarter of 2026. Actual business conditions exceeded expectations set in the previous quarter: while only 56 per cent had anticipated positive conditions for Q4 when surveyed in Q3, the realised figure reached 65 per cent.

The improvement closely mirrors Việt Nam’s macroeconomic performance. GDP growth in Q4 2025 reached 8.46 per cent, the fastest quarterly expansion since Q4 2007 and above projections from major international institutions.

“Our latest BCI confirms what many of us have felt intuitively,” said EuroCham Chairman Bruno Jaspaert. “After years of hovering around the mid-line, reaching 80 shows that confidence is now grounded in delivery, factories running, orders returning and investments being executed. We are seeing a structural shift, with Việt Nam transforming into a powerful growth engine and on track to rank among the top three economies in ASEAN.”

Beyond short-term gains, the survey reveals robust confidence in Việt Nam’s medium-term outlook. An overwhelming 88 per cent of respondents expressed optimism about their organisation’s prospects in Việt Nam over the 2026–2030 period, including 31 per cent who described themselves as very optimistic.

“Eighty-eight may sound like a lucky number, but for our members it is a rational one,” Jaspaert said. “Over the next five to seven years, provided it plays its cards right, Việt Nam is destined to become the place to be, entering a golden era of growth and transformation.”

Performance trends reinforce this view. Sixty per cent of companies reported improved business results in 2025 compared with 2024, while 82 per cent expect further improvement in 2026. In addition, 87 per cent said they would recommend Việt Nam as an investment destination to other foreign businesses, with confidence highest among larger employers with substantial local operations.

Despite the upbeat outlook, global trade tensions continue to affect business operations. In 2025, 42 per cent of respondents reported a net negative impact from global trade frictions, compared with 24 per cent who reported a positive impact, while 34 per cent saw little or no effect. Smaller organisations were more likely to report negative impacts, reflecting greater exposure to volatility and more limited buffers than larger firms.

Xavier Depouilly, General Manager of DXL Research and Consulting, noted a clear divergence in resilience.

“While large multinational corporations are using their scale to double down on long-term strategies, SMEs are disproportionately exposed to volatility, forcing them to focus on immediate revenue and survival rather than broad expansion,” he said.

US tariff policies and trade disputes were cited most frequently, mentioned by 46 per cent of respondents. The impact is felt mainly through demand shifts and revenue uncertainty at 43 per cent, followed by higher operating costs at 16 per cent.

In response, 41 per cent of firms have pursued cost optimisation, while 35 per cent increased the use of technology, automation and artificial intelligence. Others diversified operations outside Việt Nam at 23 per cent or adjusted investment plans at 19 per cent and expansion strategies at 17 per cent. Notably, 20 per cent reported making no operational changes.

Despite these pressures, 56 per cent said they are more optimistic about Việt Nam as a place to operate or invest.

“This is growth despite global turbulence,” Jaspaert said, noting that Việt Nam closed 2025 with GDP growth of 8.02 per cent, underscoring the strength of its economic fundamentals.

Administrative complexity and regulatory inconsistency remain the most frequently cited challenges, but the Q4 data shows improvement. Fifty-three per cent of respondents cited administrative burdens, down 12 percentage points from Q3. Unclear or inconsistently applied regulations followed at 52 per cent, while customs procedures, trade barriers and visa or work permit constraints were each mentioned by around one-third.

These issues most commonly result in operational delays or uncertainty at 59 per cent, higher compliance costs at 31 per cent and productivity losses at 20 per cent.

Recent reform initiatives are beginning to register, though impacts remain uneven. Resolution 68, issued in May 2025 to strengthen the private sector through reduced bureaucracy and digitalised procedures, is viewed positively in principle. By Q4 2025, 25 per cent of respondents reported some improvement in their operating environment, including 8 per cent citing major improvements, while 61 per cent reported no noticeable impact yet.

Digital reforms show a similar pattern. By the end of 2025, 76 per cent of respondents had completed enterprise registration under the VNeID system, though 24 per cent still reported difficulties, pointing to the need for greater flexibility and targeted support for foreign-invested firms.

Infrastructure development and public investment are widely seen as key growth drivers over the next 12–18 months, particularly for construction, trade, logistics and consumer-facing sectors. Faster approvals and more predictable administrative processes are also viewed as critical to sustaining momentum.

As confidence improves, European businesses are entering 2026 with clear priorities: business development and portfolio diversification at 50 per cent, talent retention and recruitment at 45 per cent and greater use of technology, automation and AI at 41 per cent.

“In 2026, EuroCham will continue to advocate for the removal of remaining bottlenecks facing our members and the wider business community,” Jaspaert said. “Through our Must-Win Battles, we are committed to driving regulatory changes that make a real difference for both SMEs and multinationals.” 

Bizhub