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Businesses believe profit will increase, despite current difficulties
Recent surveys all show that businesses still believe that their turnover and profit will increase in the next 12 months, even though they are facing a lot of difficulties at present.
The latest survey conducted by WVB Vietnam (WVB FISL) and PVFC Invest showed that the business confidence index (BCI) of the first quarter of 2009 increased by six points, reaching 99 points – it was 93 points in the fourth quarter of 2008.
The survey, conducted during two weeks, from March 8 to March 27, with the participation of 150 enterprises in 11 key business fields in Vietnam, showed that in general, most general directors and managers of businesses believe turnover and profit will increase in the next 12 months.
Some 51% of businesses believe in better economic prospects for the next year in Vietnam. Vo Quoc Thang, General Director of Dong Tam Joint Stock Company, said that he also thinks businesses have more confidence in business now.
At the end of 2008, businesses all faced big difficulties due to high interest rates and narrowed markets. However, they feel that the national economy and businesses’ operations have gotten better because the government has applied a series of measures to boost production and business.
However, Thang said that difficulties will still exist in 2009, and that the national economy will not recover until 2010.
Thang applauds the government’s decision on launching the interest rate subsidy programme for medium- and long-term loans as well (in the first stimulus package the subsidised interest rate scheme was applied to short-term loans only). Thang said that with the low-cost capital, businesses will be braver about borrowing money and making investment in production.
Thang said that businesses should not only focus on obtaining profit in 2009, they should also pay attention to stabilising production and retaining labourers. “The four parts of the national economy, the government, businesses, shareholders and labourers, need to share difficulties now to survive and develop,” Thang said.
Sharing the same view as Thang, Pham Dinh Doan, Chairman of Phu Thai Group, also said that he believes in the recovery of the national economy.
However, analysts have also pointed out that the survey by WVB FISL and PVFC Invest was mainly carried out in leading businesses in the country in terms of brand name, total assets, total turnover and number of labourers. Therefore, the survey might not reflect all the current difficulties of enterprises in their operation and truly reflect the confidence level of businesses.
In the first three months of the year, the number of newly-registered businesses saw a decrease in comparison with the same period of last year. According to the Business Development Agency under the Ministry of Planning and Investment, in Q1 2009, Vietnam had 15,600 enterprises registering businesses with the total registered capital of VND77,400bil, down by 3.2% in number of enterprises and 46.2% in registered capital in comparison with the same period of last year.
Meanwhile, a survey conducted recently by local newspaper Thoi bao Kinh te Vietnam of 1,500 businesses showed that 28% of businesses are in danger of going bankrupt, 10% may have to halt production for a certain time.
VietNamNet, DT
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