HCMC – European businesses in Vietnam are showing resilience and optimism for the future, despite recent economic challenges, according to the latest EuroCham Business Confidence Index (BCI).
The BCI for Q3 2024 increased to 52.0 from 45.1 in the same period last year. This positive outlook persists despite disruptions caused by typhoon Yagi, which wreaked havoc on infrastructure and agriculture in northern Vietnam.
European businesses remain confident about Vietnam’s long-term market potential. Around 69.3% of respondents expressed optimism about the business climate over the next five years.
About 80% of surveyed companies have established a presence in the country, and over half of those participating in the survey indicated intentions for further growth. Vietnam continues to attract European investment, with 67% of businesses still recommending the country as a favorable investment destination.
However, administrative bottlenecks, unclear regulations and difficulties in obtaining licenses and permits are the top three obstacles for European businesses. Companies also face challenges in hiring skilled local and foreign talent due to skill gaps, high turnover rates, visa restrictions, and limited training resources.
The survey highlights growing interest in renewable energy projects, with nearly 30% of businesses expecting to benefit from the new Direct Power Purchase Agreement (DPPA) mechanism.
AI and machine learning (AI/ML) adoption is moderate, with 46.1% of companies reporting the use of AI/ML in their operations. Most businesses are still in the early stages of adopting these technologies, signaling opportunities for further digitalization investments.
Rising airfares are affecting business travels, with some companies opting for more selective trips or alternative transportation methods.
