EuroCham Business Climate Index survey sees slight dip in business confidence

Saturday, Jun 06, 2015 09:00

The Viet Nam's business confidence is down slightly from the previous quarter, says EuroCham Business Climate Index survey. — Photo

HCM CITY (Biz Hub) — The 18th quarterly EuroCham Business Climate Index survey, done in April 2015, found business confidence, outlook and expectations for the future among European businesses in Viet Nam down slightly from the previous quarter.

The BCI decreased from 78 to 75.

The overall score still expresses a relatively positive perception of the current and future business environment in the market. Most respondents had replied prior to the internet cuts during April, and so the survey does not fully take into account how that affects perception of the business environment.

The survey asked the participants if they were aware of amendments to the Enterprise Law and Investment Law and how they perceived the changes.

Twenty per cent each said they were aware and believed the changes to be overall beneficial, were aware of the changes but did not believe they would impact their business, and were not aware of the new regulations.

Another 20 per cent said they were only aware there would be changes, but not what they would be. Nine per cent said they were aware and believed the changes would not benefit their business while 6 per cent said they were aware and believed the changes to be obstructive to their business.

Notably, 41 per cent of the participants were unaware of the details of the new regulations, and 20 per cent were completely unaware.

The majority of respondents continued to perceive their business outlook as "positive," but the number saw a decline from 62 per cent last quarter to 57 per cent.

The second largest group comprised those with a "neutral" outlook, rising from 28 per cent last quarter to 30 per cent. The remaining participants were equally divided between "excellent" (11 per cent) and "poor" conditions (2 per cent).

Confidence in Vietnam economic outlook

In their assessment of the macroeconomic outlook for Vietnam, 63 per cent of respondents reported "stabilisation and improvement," a rise from last quarter's 59 per cent.

Those expecting the situation "not to change" also increased from 20 per cent to 25 per cent. The noticeable decline was in the number expecting "deterioration of macroeconomic conditions," which fell from 21 per cent to 12 per cent.

Respondents expected that over the next six months inflation would fall from 5.78 per cent to 5.25 per cent.

In headcount growth, the largest group was the one considering increasing "slightly" the number of employees, which remained unchanged at 48 per cent. The second largest group at 32 per cent said it expected to "maintain" the number of employees at the current level.

This was also true for investment plans in the medium term where the largest group, remaining unchanged at 41 per cent, was the one considering increasing their investment in Vietnam "slightly".

It was followed by the group expecting to "maintain" the level of investment, which accounted for 35 per cent.

In terms of expected orders/revenue the largest group, rising from 56 per cent to 60 per cent, said it expected a "slight increase" while 14 per cent each said they expected a "significant increase" and wished to "maintain" the same level.

Around 65 per cent said inflation would have a slight impact on their business situation while 17 per cent feared a significant impact and 1 per cent event went as far as to say inflation threatened their very business.

Only 7 per cent said inflation would have no impact on them.

HR-specific questions

The BCI asked the respondents questions relating to the new immigration laws.

To a question if their companies had faced difficulties in implementing the new immigration law, 49 per cent said no/no difficulties so far, followed by 39 per cent who said they did have difficulties.

The remaining 12 per cent said the new law did not affect their business.

Asked if the procedures to obtain/renew visas and temporary residence cards were clear to the participants and their HR departments, 56 per cent said they always needed to seek clarifications from authorities/service providers during the application process, while the remaining 44 per cent said the process was clear and they could apply for them.

But a whopping 73 per cent described the procedures as "troublesome" and hoped for clearer procedures and criteria for each visa type.

Nine per cent said the processing time was reasonable if they lodged non-problematic applications and saw it as an encouraging sign; 4 per cent said the process was clear and easy compared with immigration laws/requirements in other countries.

The three largest groups of participants in the survey were from services, trading, and manufacturing. —VNS

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