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Saturday, July 20, 2024

Over 80% of German businesses intend to expand production in Vietnam

The Saigon Times

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HCMC – Up to 83% of German companies in Vietnam said they would continue expanding production in the next 12 months, according to the AHK World Business Outlook 2021 recently released by the Delegate of German Commerce and Industry in Vietnam.

Although the rate of German firms that are optimistic about Vietnam’s economic recovery was 33%, lower than the figure at the beginning of this year, 55% of German firms expected positive development in 2022.

Some 33% of the respondents are planning to increase hiring in Vietnam.

Travel restrictions and problems with supply chains and logistics were major challenges hindering the growth of German companies, the report said. Canceled orders and declining demand have also severely affected their investment and expansion plans.

Besides, German firms are facing a shortage of skilled labor, with up to 42% of them saying they are having difficulty employing high-quality personnel.

Other issues regarding economic policy, financial approach, legal safety and infrastructure, in addition to border closures and the cancellation of exhibitions and trade events due to Covid-19, have also significantly affected their operations.

The AHK World Business Outlook is an annual survey conducted by the German Chambers of Commerce and Industry Abroad with the participation of German firms and investors overseas. This year, it received feedback from more than 3,200 German companies and subsidiaries worldwide, including Vietnam.

Small companies with fewer than 100 employees account for 42% of the responses in Vietnam, while 33% of businesses employ 100 to 1,000 people and large companies with more than 1,000 employees account for 25% of respondents.

Some 39% of the responding companies are from the industry and construction sector, 12% from the service sector, and another 49% are trading companies.

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