Business Climate Index Q1-2011 - Up 4 points from 75 to 79

Results of the second quarterly EuroCham Business Climate Index survey, conducted in January 2011, and released today, show that business confidence and outlook among European businesses in Vietnam has increasedsince our last survey. Among the EuroCham members that participated in the survey, business confidence was overall positive. This resulted in a EuroCham Business Climate Index of 79.

EuroCham Chairman Alain Cany commented on the survey: “The increase of the EuroCham Business Climate Index from 75 to 79 came a bit surprising to me. However, it certainly reflects the broad confidence of our membership in Vietnam’s business prospects after the 11th Party Congress and the new leadership announcement. It also means that European companies doing business in Vietnam believe that the new Government team will be able to tackle the main economics issues and accelerate some key structural reforms to further increase Vietnam’s competitiveness.”

Solid current business situation:

With 73 percent, the majority of respondents to the survey focus their activities on the local market in Vietnam. When asked about the current situation of their business, the response was largely positive. The majority of businesses assessed their current situation as ‘good’ or ‘neutral’. The number of businesses describing their situation as ‘excellent’ rose from 6 to 11% points.

Investment plans increased in 2011:

When asked about their business outlook and investment plans 2011, the predictions were largely positive without major changes. The percentage giving a negative response declined from 12% to 8%. As far as investment plans were concerned, there was a slight shift in respondents that wanted to increase their investment in Vietnam ‘significantly’ (up from 23% in the last survey to 32% this time).

Significant salary increases expected:

Salaries for skilled labor in 2011 are expected to increase significantly: 54% indicated they expect salaries to rise by more than 10% this year (up from 30% last time). For unskilled labor salaries, a massive increase of 36% was expected (up from 19% last time).

Optimistic about their own sector growth:

58 percent of businesses in the survey responded that they expect their sector to grow by more than 8% in 2011 (up from 42% last time), showing an overall confidence in further economic development of their business in Vietnam.

Higher inflation rate expected in late 2011

The majority of businesses in the survey (32%) expects inflation in Vietnam to reach 6-8% by the middle of the year. Towards the end of 2011, the majority of respondents see inflation rising to levels higher than 10% (35%)

EuroCham Executive Director Matthias Dühn added that “In particular, the survey shows that our member companies are more optimistic about their sector growth in Vietnam, and have increased their investment plans for Vietnam as compared to our last survey.  However, it also seems that our members are increasingly concerned about inflationary pressures. EuroCham therefore believes the key challenges for Vietnam’s leadership in 2011 will now be maintaining investor’s confidence in macro-economic stability, in particular by balancing growth and inflation.”  

Please refer to the documents below for further details.

  1. Press Release (EN)
  2. Press Release (VN)
  3. 2nd Business Climate Index Survey Results Overview

For enquiries about the EuroCham Business Climate Index, please contact:

Mr. Jan Wiehler
EuroCham Marketing& Services Manager
Tel.: (84-8) 3827 2715 Fax: (84-8) 3827 2743

Please click here to see the results of the last survey

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