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EuroCham: European businesses remain positive

Released at: 15:46, 20/10/2016

EuroCham: European businesses remain positive

Photo: Viet Tuan

BCI for Q3 shows EuroCham members feeling increasingly confident about Vietnam today and in the future.

by Hong Nhung

The European Chamber of Commerce in Vietnam (EuroCham) released its Business Climate Index (BCI) for Quarter 3 of 2016 on October 18, with positive sentiment among EuroCham members about Vietnam’s business environment set at a level of 86, up from 77 in the second quarter.

The results of the BCI survey found that 71.5 per cent of respondents described their current business situation as “excellent” or “good” while only 5.5 per cent described it as “not good” and no respondents answered “very poor”.

Perceptions are also positive about the future, with 16.5 per cent of responses answering “excellent” and 64.2 per cent “good” when asked about their business outlook in the fourth quarter. Only 2.7 per cent of responses were negative.

In regard to Vietnam’s macro-economic outlook in the fourth quarter, EuroCham members are confident that stability is likely to continue, with almost 60 per cent of respondents expecting “stabilization and improvement”. Only 4.6 per cent expect deterioration while the number that expect no change increased 3.2 per cent since the second quarter.

Most respondents (around 41 per cent) intend to maintain their level of investment in the country. The number of those who intend to increase their investment is not too far behind, however, at 39 per cent, while 17 per cent plan to invest significantly more. Less than one per cent plan to curtail their activities, a marked fall from 7 per cent in the second quarter.

This EuroCham BCI included a new section, with questions on Green Growth. Respondents were asked how important the availability of clean and renewable energy is to their business. Responses were balanced, with “very important” at 20.4 per cent, “important” at 29.6 per cent, and “not important at all” at 23.1 per cent.

The survey also enquired whether rising air pollution levels in Vietnam could encourage respondents to move their business elsewhere. Almost 58 per cent replied in the negative, with 18 per cent stating they may consider doing so. Twenty-five per cent were unsure.

Lastly, companies were asked which regulatory changes would have the strongest impact on attracting FDI in the clean and renewable energy sector. “Favorable conditions for investors in the clean and renewable energy field” was the preferred answer of the majority, with almost 30 per cent, closely followed by “Tax incentives” with 27 per cent. “Liberalization of the State-controlled electricity sector” was selected by 20 per cent of respondents and “attractive feed-in tariffs” by roughly 18 per cent.

“The results for Q3 show positive expectations for the near future and consistent satisfaction with the present situation,” EuroCham Chairman Michael Behrens commented. “Members maintain a positive view on the Vietnamese market and their business operations in the country, a result that does not differ from our last survey. This is a good sign for the current implementation of the EU-Vietnam Free Trade Agreement (EVFTA), which is expected to strongly enhance European business and investment.”

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