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European businesses more confident in Vietnam: Survey
Confidence and outlook among European businesses in Vietnam has increased given good indicators for Vietnam’s economy in 2011, the European Chamber of Commerce in Vietnam (EuroCham) said on Thursday.
Results of the EuroCham Business Climate Index survey, which was conducted last month and released on Thursday, unveiled better confidence of the organization’s member businesses operating in Vietnam with an index of 79 compared to 75 in the first survey publicized in the fourth quarter of 2010.
“The increase of the EuroCham Business Climate Index from 75 to 79 came a bit surprising to me,” EuroCham Chairman Alain Cany commented. “However, it certainly reflects the broad confidence of our membership in Vietnam’s business prospects after the 11th Party Congress and the new leadership announcement.”
Cany said the result also meant that European companies doing business in Vietnam believed that the Government would be able to tackle the main economic issues and accelerate some key structural reforms in years to come to further enhance Vietnam’s competitiveness.
The survey indicated up to 73% of respondents said they would focus their resources on the local market in Vietnam. European businesses also underlined a largely positive view in relation to their current business situation, and the number of businesses describing their situation as ‘excellent’ also rose in the second survey.
As for investment plans in 2011, the survey presented positive responses, and a decline in the businesses giving a negative view to 8% from 12% in the first survey. The respondents were also optimistic about their sector growth, as 58% of them expected growth to exceed 8% in 2011, showing an overall confidence in further economic development of their business in Vietnam.
Significant salary increases are foreseeable this year, as a result of better economic and business performance. According to the survey, 54% of the surveyed businesses forecast salaries to rise by more than 10% this year for skilled employees compared to 30% of the respondents in last time’s survey.
High inflation is still a major concern for the European companies in Vietnam in 2011. The survey showed 32% of the respondents predicted inflation to reach 6-8% by the middle of the year, and 35% saw inflation rising to levels higher than 10% towards the end of the year.
EuroCham Executive Director Matthias Dühn said EuroCham member companies were more upbeat about their sector growth and plan more investment in this market. However, they feel increasingly inflationary pressures.
“EuroCham therefore believes the key challenges for Vietnam’s leadership in 2011 will now be maintaining investor’s confidence in macro-economic stability, in particular by balancing growth and inflation,” Dühn said.
vietnamnet, SGT
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