European firms in Vietnam maintain strong optimism: EuroCham

ABO/NDO- The European Chamber of Commerce (EuroCham) in Vietnam on October 8 released its 2024 Business Confidence Index (BCI) report for the third quarter of 2024, reflecting a positive trend in business sentiment despite the economic challenges posed by Typhoon Yagi and operation hurdles.

The BCI score saw a notable increase, rising from 45.1 in the third quarter of 2023 to 52.0 in the third quarter of 2024, signalling a strong year-on-year recovery despite tough external conditions.

EuroCham’s latest survey showed that long-term optimism remains high, with 69.3% of of respondents expecting a favourable business climate over the next five years.

Workers produce pills at the factory of Medcen Joint Stock Company in Hoa Binh Industrial Park, Long An province (Photo: VNA).

This positive outlook is further reinforced by Vietnam’s continued appeal as an investment destination, with 67% of European businesses still recommending the country despite ongoing challenges.

Bruno Jaspaert, Chairman of EuroCham Vietnam, said that despite the recent economic strain caused by Typhoon Yagi, the resilience and adaptability of both the Vietnamese economy and European businesses operating there are evident in this latest survey. These results are not just numbers, they tell a story of Vietnam’s evolving role as a strategic business hub, he added.

Following the new Decree on the mechanism for Direct Power Purchase Agreement (DPPA) issued in July this year, nearly 30% of respondents expect to benefit from renewable energy projects, further solidifying Vietnam’s commitment to a green transition. One in four service providers and companies with 100 or more employees anticipate the DPPA will benefit them moderately or significantly.

Thue Quist Thomasen, CEO of Decision Lab, held that while the survey shows an overall improvement, the challenges highlighted - particularly in digitalisation -underscore the need for concerted efforts to enhance these areas. The adoption of technology will be pivotal for companies to streamline processes and adapt to sustainable standards in the future, he said.

The quarterly BCI, conducted by Decision Lab, serves as a vital tool for understanding the perceptions of European and Europe-related companies and investors in the Vietnamese market.

As in previous quarters, the survey shows that the top three operational obstacles for European businesses are administrative burdens, unclear regulations, and difficulties in obtaining licenses and permits.

Conducted since 2011, the BCI collects feedback from EuroCham Vietnam’s extensive network of 1,400 members across a diverse range of sectors. This survey provides valuable insights into the current business landscape in Vietnam and expectations for its future. BCI is considered as a key indicator of economic activity in the country.

(Source: NDO)