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European firms more cautions about investment in VN
European firms are more cautious when they are asked about their investment plans for 2011 in Vietnam although 52 percent of businesses still want to increase their investment.
The latest survey conducted by European Chamber of Commerce in Vietnam (Eurocham) released on July 25 said that most companies (32 percent) wanted to maintain their level of investment and 31 percent were looking to increase their investments in Vietnam by a little bit.
However, European firms’ business confidence dropped 7 points further to 63, which shows a continuation of the trend that businesses are getting more cautious about investing here.
Compared to previous survey, there was a 10 percent drop in respondents assessing their current business situation as ‘good’ or ‘excellent’ to 46 percent down from 56 percent before and 64 percent in the first quarter of 2011. The number of businesses having a negative view on their current situation rose slightly from 12 to 16 percent points.
Despite this, businesses gave quite positive answers on their expected number of orders and revenues on the medium term.
Fifty-four percent expected an increase in revenue in the medium term, this is an increase of more than 10 percent from 43 percent in the last quarter. Fever companies (42percent) expected their number of orders to remain constant or decline than last quarter where this view was shared by more than half (56percent). In line with this were the respondents recruitment plans. 51percent of respondents expected to hire more staff in the medium-term. 34 percent expected to maintain the same level and only 9 percent where looking to reduce their staff in Vietnam .
Vietnam ’s inflation in July was 22.16 percent, according the General Statistics Office. Predictably, 56 percent of companies expect inflation to have a significant impact on their business and 37 percent expected to be impacted in some way.
When asked about the amount of bureaucracy affecting their business over the past year, 53 per cent responded that it had remained constant. More than one third reported an increase in bureaucracy and only 10 per cent reported a decrease.
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