European companies in Vietnam say confidence en route to pre-pandemic levels

The Business Climate Index of European companies in Vietnam has climbed back to near pre-pandemic levels amid the economic recovery.

It rose 10.3 percentage points in the first quarter from the previous quarter to 73.9 percent, according to a survey released by the European Chamber of Commerce in Vietnam (EuroCham).

This is the fourth straight quarterly increase since the index plunged to a historic low of 26.7 points in the first quarter of last year due to Covid-19.

“The Business Climate Index confirms once again that Vietnam is open for business,” EuroCham Chairman Alain Cany said.

While countries continue to struggle with the impact of Covid, Vietnam has ensured that companies could continue to operate as close to normal as possible, and this is driving the confidence of European business chiefs, he added.

Sixty-seven percent of respondents said their business outlook for the second quarter is either “excellent” or “good”, up 12 percentage points from this quarter.

Forty-one percent expected their payroll to expand in the second quarter.

“The fact that more business leaders are anticipating a rise in their headcount and investment plans are a vote of confidence in Vietnam’s long-term prospects,” Thue Quist Thomasen, CEO of YouGov Vietnam, which conducted the survey, said.

Over 60 percent of EuroCham members have benefited from the EU-Vietnam Free Trade Agreement since it came into effect in August last year.