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European business leaders remain confident about Vietnam market

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HCMC – The confidence of European business leaders in the business environment and outlook of Vietnam continues to stabilize despite uncertain times, according to the latest Business Climate Index (BCI) from the European Chamber of Commerce (EuroCham) and HCMC-based Decision Lab.

The overall BCI score saw a slight increase over the last three months. It rose from 27% in the first quarter of 2020 to 34% in April, and remained stable into the second quarter. The confidence is returning to the market after a drop during the initial emergence of Covid-19. However, the BCI also shows that European business leaders continue to feel the impact of the global pandemic and remain cautious about the future prospects of their enterprises.

The latest BCI reveals that European enterprises fared better over the last three months than first anticipated at the height of the Covid-19 pandemic. In the first quarter, just one-in-10 EuroCham members had foreseen a short-term improvement in their performance. However, businesses outperformed these predictions, with 24% describing their business situation as “good” or “excellent” over the last three months.

Looking ahead, there are more grounds for optimism, with around a quarter of EuroCham members predicting a rise in orders in the third quarter of the year. Meanwhile, a further 28% anticipate a similar level of orders in the second quarter.

In spite of these positive signals, companies continue to feel the impact of Covid-19 on their business operations, with around half predicting a drop in the headcount in the next quarter.

“Despite the stormy waters of a global pandemic, our data shows that the government’s swift and effective response to Covid-19 has successfully steadied the ship here in Vietnam. While the confidence of our member companies has improved and stabilized, business leaders continue to feel the effects of this virus and remain cautious about the future prospects of their business operations,” said Nicolas Audier, Chairman of EuroCham.

The BCI is a regular barometer of the EuroCham members, and each quarter, it tracks the performance of EuroCham’s member companies and their perceptions over the economic environment in Vietnam.

By Le Hoang

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