80% of American firms in Vietnam concerned about economic impacts of coronavirus
88% of the companies praised the Vietnamese government’s effective communication of health and safety updates.
Up to 80% of members of the American Chamber of Commerce in Hanoi (AmCham) have expressed “a great deal” and “a lot” of concern over economic impacts of the coronavirus epidemic in Vietnam and also showed their confidence in the Vietnamese government’s response to the virus.
Nearly a half (49%) of the respondents expected the coronavirus outbreak would impact their business operations in Vietnam “to a great extent” while 36% said the impact would be mild and the remaining 15% expected the impact would be insignificant, according to an AmCham survey about the business impact of the coronavirus in Vietnam.
| Source: AmCham survey|
The survey focused on quantitative issues such as the coronavirus’ expected impact on corporate revenues and Vietnamese GDP, as well as workplace issues such as travel and work from home policies. The survey took place before the latest restrictions on business activity and movement.
Among the biggest business challenges, Reduced revenue/demand for their products or services took the top place. Other major challenges include Reduced staff productivity do to workplace changes, General uncertainty in the economy, Inability to get the right personnel due to travel restrictions, and Increased costs.
Manufacturing companies said they are operating at 76% of their normal capacity while 78% said they have sufficient start to run a full production line.
Manufacturing companies said they continue to face challenges from reduced order demand, logistics, cash flow management, and finding alternative materials/goods supplies.
“The ongoing coronavirus outbreak is causing anxiety and uncertainty for both people and businesses in Vietnam. AmCham members are primarily concerned with ensuring the safety of employees, supply chain disruptions, and coping with the sharp drop in consumer and customer demand,” said AmCham Executive Director Adam Sitkoff.
To mitigate the impacts of the pandemic, 50% of the surveyed companies are delaying hiring of new employees while 37% stick to existing HR plans. In addition, 27% plan to reduce working hours, 127% plan to reduce salaries or other monetary benefits while 10% are cutting jobs. Just 2% have plans to expand their workforce or increase salaries.
| Source: AmCham survey|
The absolute majority (98%) of the companies are taking action to minimize potential transmission of Covid-19 between employees and/or between employees and the public.
The survey also showed that 69% of the respondents have no intention to repatriate staff or family members to their home countries while 12% plan to do so.
To limit transmission, 73% of the companies are restricting business-related travel within Vietnam while 23% do the opposite.
Feedback on Vietnamese government’s response
Up to three fourths of the respondents were positive about the Vietnamese government’s response to the coronavirus crisis, with 15% rating the response “Extremely effective” and 62% rating “Very effective”. No negative feedback was recorded.
| Source: AmCham survey|
In addition, 88% of the companies praised the Vietnamese government’s effective communication of health and safety updates.
More than one half (58%) of the surveyed companies deemed that the Vietnamese government has been effective in addressing the potential economic impact of Covid-19.
One third of the respondents expected the pandemic would shave between one and two percentage points of Vietnam’s GDP growth while 44% said the impact would be larger, taking more than two percentage points of Vietnam’s economic growth.
“Our members express their support and appreciation for the government's efforts to keep people safe and healthy during this crisis. Almost all survey respondents said that the government is doing an effective job responding to the crisis,” Sitkoff commented.
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