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Ho Chi Minh City
Wednesday, December 7, 2022

Less than half of industrial businesses in HCMC optimistic about Q1 2022

By Dung Nguyen

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HCMC – Less than half (43.6%) of industrial businesses in HCMC are optimistic about their business situation in the first quarter of 2022, according to a report of the HCMC Statistics Department on the city’s socioeconomic development.

Meanwhile, 28.1% expected their business situation to remain stable and the remainder felt their condition would worsen.

Some 41.7% of industrial businesses in the city expected to see an increase in new orders in Q1 2022, while 24.3% of businesses said they plan to scale down their workforce.

Regarding production cost, 33.3% forecast that it would increase, while 51.6% expected that it would stay stable and only 15.2% predicted a decrease in production cost.

HCMC’s economy has recovered after social distancing measures were relaxed, but the recovery remains weak.

Some 48.4% of the firms said their business situation improved in the fourth quarter of 2021 compared with the third quarter, while 19.3% said their condition was stable and 32.3% saw their situation worsen.

Nearly 40% of industrial businesses are facing financial hardships. Besides, 23.1% said interest rates were high and 7.6% had limited access to capital.

According to the report, the factors that affected the operations of businesses the most in the fourth quarter of 2021 were low domestic demand, fierce competitiveness, labor shortage and a lack of input materials.

HCMC’s gross regional domestic product (GRDP) in 2021 tumbled 6.78% year-on-year, the sharpest fall ever, according to the municipal Statistics Department.

The city’s GRDP in 2021 was some VND1.3 quadrillion. The contraction of 6.78% was much lower than the 5.06% decline estimated in September and the 1.39% growth last year.

The index of industrial production fell 14.3%, while the retail sales of consumer goods and services plunged 21.9%, and the total investment in the city slid 22%.

This year, the city had more than 30,800 newly-established enterprises with total registered capital of VND517.7 trillion, down 23.5% in the number of firms and 53.5% in registered capital.

In related news, the highest bonus for the upcoming Lunar New Year (Tet) in the city has been reported at VND1.3 billion (US$57,000) in a foreign-invested firm, according to the municipal Department of Labor, Invalids and Social Affairs.

A survey on more than 1,000 businesses employing nearly 175,000 workers in the city showed that despite the numerous difficulties caused by the Covid-19 pandemic, many businesses are still trying to give Tet bonuses to their employees.

Le Minh Tan, director of the HCMC Department of Labor, Invalids and Social Affairs, said the average bonus for the upcoming Tet in the city is VND4.2 million (US$184) per person, down more than half compared with the previous Tet.

In addition to the Tet bonus, local enterprises will also offer their workers other support such as Tet gifts and train/bus/flight tickets to return home.

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