HANOI – The European Chamber of Commerce (EuroCham) has announced its Business Climate Index (BCI), expressing concern over the coronavirus which is posing a tough challenge for their businesses in Vietnam.
The BCI is a regular barometer of how European business leaders see the trade and investment environment in Vietnam and the prospects of their own enterprises.
Each quarter, the chamber asks its members to answer a range of questions covering issues such as their investment plans, revenue projections and workforce levels.
Following similar trends around the world, where Covid-19 has hit international trade and investment, the EuroCham BCI plunged to its lowest-ever score of 26% in the first quarter of 2020.
This represents a fall of 51 points from the 77% recorded in late 2019, which is a direct result of the impact of Covid-19. Over 90% of business leaders indicated that Covid-19 has had a negative impact on their enterprise, with more than half reporting a significant negative impact.
Meanwhile, almost 80% reported that their business had incurred higher costs from measures adopted to protect their workers and prevent the spread of the virus.
Despite the negative financial impact of Covid-19, European companies are taking important steps to protect both the health and livelihoods of their workforce. Four out of five business leaders are confident that they will be able to retain at least 70% of their staff over the next quarter. Meanwhile, 80% of businesses have asked their staff to work from home to prevent the spread of the virus.
EuroCham members also welcomed Government measures introduced in Directive 11 to support businesses during the pandemic. A deferral of tax and land rent was the most popular provision, with the suspension of social insurance contributions coming in at a close second.
“This data shows that Covid-19 is having a deep and serious impact on European businesses in Vietnam,” EuroCham Chairman Nicolas Audier said.
“However, it is important to remember that this is a global pandemic, and enterprises around the world are suffering from the effects of this crisis,” he added.
There is also no doubt that without the swift and decisive actions of the Government, the situation here could have been much worse.
Covid-19 is a fast-moving health crisis, and it is creating unprecedented challenges for businesses of all types and sizes and across all sectors and industries. Therefore, further action could soon be required to help both domestic and foreign enterprises weather this storm and resume their usual business activities.
“EuroCham is committed to Vietnam’s long-term economic growth, and our members remain available to share their insights and recommendations to help minimize the disruption of Covid-19 on business operations and – above all – to protect the health and wellbeing of people in Vietnam,” Audier noted.