According to the Business Climate Index (BCI) of the European Chamber of Commerce in Vietnam (EuroCham), European companies are more confident in the business climate in Vietnam after the end of the lockdown.
The BCI peaked after the fourth wave, with positive sentiment at 61 points. That represents a 42-point jump since the third quarter of 2021, with business leaders welcoming the end of lockdowns and the reopening of normal commercial activities. The BCI remains below its pre-pandemic peak. However, it is clear evidence that confidence is returning to the market.
The BCI is a regular barometer of European business leaders and investors. Each quarter, EuroCham asks its more than 1,200 members – including business leaders and investors across all sectors and industries – about their perceptions of the Vietnam trade and investment environment and their forecasts for the prospects of their own companies. The fieldwork for the BCI has been carried out by YouGov Vietnam since 2020.
More than half (58%) of European business leaders now expect economic stabilization and growth in the first quarter of 2022. That represents an eight point increase in optimism. Meanwhile, less than one in five (17%) now predict deterioration – a figure that has nearly halved since the last BCI.
Business leaders are also more confident in the prospects of their own companies in this post-pandemic ‘new normal’. Therefore, 43% plan to increase their investment in the first quarter of 2022, compared to just 17% three months ago. Similarly, more than a third (38.5%) plan to increase their workforce – an increase of about 15% – while more than half (51.5%) predict an increase in orders and revenue, an increase of 7 .5% compared to the third quarter.
Commenting on the BCI, EuroCham President Alain Cany said:
“These latest figures show confidence in Vietnam’s trade and investment environment now that the pandemic is back under control, as well as in the government’s clear direction that we are learning to live with the virus.
“Business leaders welcome a return to life as normal and business as usual, and in particular the easing of entry requirements for vaccinated foreigners living and working here. Nearly 90 percent of our member companies reported that past restrictions impacted their commercial activities. Thus, these new regulations will help to improve the business environment and further increase the confidence of business leaders.
“However, some sectors are at risk of falling behind in the race to recover from the pandemic. Tourism – one of Vietnam’s most important economic sectors and responsible for millions of jobs – is limited to guided tours and slows economic growth. Therefore, we encourage the government to move forward and accelerate reopening — at least in high-vaccination areas — so that Vietnam can reach its full potential as a leader in these and other industries and attract more foreign investment by 2022.”
Thue Quist Thomasen, CEO of YouGov Vietnam, added:
“Our data shows that confidence and optimism are returning as companies return to work. European business leaders plan to increase their workforce, investment plans and revenues now that the pandemic is back under control.
“The challenge now is to capitalize on this positive sentiment and ensure that companies across all sectors and industries can realize their full potential. This will allow European companies to make their greatest possible contribution to Vietnam’s economic growth in 2022.”
By Lan Truong @ YouGov Vietnam