Log in
Business

European businesses remain confident about Vietnam’s long-term prospects

The EuroCham Business Climate Index reaffirms the urgent need for Vietnam to accelerate vaccinations.

European business leaders remain confident about the future prospects of their own companies in Vietnam despite short-term challenges.

 Source: EuroCham BCI, Q2 2021

The latest data from the European Chamber of Commerce in Vietnam (EuroCham) Business Climate Index (BCI) showed more than half (56%) of surveyed businesses predicted an improved or neutral performance in quarter three (Q3) of this year while 80% of respondents plan to maintain or increase their headcount and investment. 

The survey noted the fourth wave of Covid-19 in Vietnam has knocked the confidence of European business leaders.

   

Before the fourth wave struck, the BCI had almost climbed back to pre-pandemic levels, reaching 73.9 in Q1. However, this latest outbreak and the spread of new variants have plunged the Index by almost 30 points in Q2 to 45.8. This is a significant drop, though not as steep as during the first outbreak of the pandemic in 2020.

The Covid-19 resurgence has also led to increased pessimism about the short-term outlook of Vietnam’s business environment. Only one-fifth of EuroCham members (19%) believe that the economy will stabilize and improve in the next quarter, a decrease by almost two-thirds from 61% in Q1.

Thue Quist Thomasen, CEO of YouGov Vietnam, said despite the short-term shock of this fourth wave, the data shows that Vietnam’s long-term prospects remain positive. 

“European business leaders are predicting maintaining or increasing their staff and investment plans - even in the midst of this current outbreak - which demonstrates a continued confidence in Vietnam’s trade and investment environment,” he said.

Urging mass vaccination drive

The BCI also showed the urgent need for Vietnam to roll out a mass vaccination program. More than half of business leaders (58%) predict that their companies would see a significant, negative impact if their staff could not be vaccinated in 2021. Meanwhile, nearly half (44%) have not been contacted to prepare for vaccination.

 Source: EuroCham BCI, Q2 2021

EuroCham and its nine business associations asked their members if they would be willing to cover the cost of vaccinating their own staff. Of the responded 430 (representing around one-third of the chamber’s total membership and around 95,000 staff) 399 said they would be prepared to do so. 

With full vaccination requiring two shots, this suggests that at least 190,000 doses will be needed just to vaccinate the direct employees of these companies alone. However, the real number of doses required could reach over half a million if all European enterprises and their staff were taken into account. 

Meanwhile, 259 of those who responded are also willing to cover the cost of vaccinating the families of their staff members. When these dependents are taken into account, the real figure of doses required will be much higher.

EuroCham Chairman Alain Cany said there is no route out of this fourth wave without an ambitious and accelerated mass vaccination program, which will enable normal life to resume. 

“European companies are prepared to cover the cost of protecting their own staff-this will help to speed up vaccination while also reducing the financial and administrative burden on the state. But we need access to sufficient supplies,” he added

EuroCham is using all the tools at its disposal to support Vietnam in procuring enough doses, and European businesses are confident that business confidence will rebound as soon as the Southeast Asian country can achieve mass vaccination.

Reactions:
Share:
Trending
Most Viewed
Related news
French leading corporations propose nuclear power, high-speed rail cooperation in Vietnam

French leading corporations propose nuclear power, high-speed rail cooperation in Vietnam

Top French firms like EDF, Alstom, and Thales are looking to partner with Vietnam on nuclear power, high-speed rail, and aerospace projects.

Vietnam's firm launches the Philippines' first electric taxi service

Vietnam's firm launches the Philippines' first electric taxi service

The Philippines is GSM’s fourth market after Vietnam, Laos, and Indonesia, signaling a significant step in its Go Green Global strategy for expanding electric vehicles internationally.

Qualcomm's Hanoi-based AI R&D center is the 3rd largest globally 

Qualcomm's Hanoi-based AI R&D center is the 3rd largest globally 

The establishment of Qualcomm's new Artificial Intelligence Research and Development Center reflects Vietnam’s efforts to attract global tech investment and talent, aligning with its ambition to become a regional AI powerhouse.

US-ASEAN Business Council supports balanced Vietnam-US trade agreement

US-ASEAN Business Council supports balanced Vietnam-US trade agreement

The US's long-term cooperation with Vietnam would yield strategic benefits and help improve a fair and balanced trade.

Hanoi prioritizes job creation for growth

Hanoi prioritizes job creation for growth

The improvement in Hanoi's labor market indicates the city's growth momentum between January and May.

Vietnam targets 70% of adults to shop online by 2030

Vietnam targets 70% of adults to shop online by 2030

Businesses and consumers are the main forces driving sustainable e-commerce.

Vietnam enables 20 million young people to launch e-commerce startups

Vietnam enables 20 million young people to launch e-commerce startups

The program focuses on delivering AI and digital business training to youth across Vietnam, with a special emphasis on underserved and remote communities.

Hanoi expands safe agricultural supply chains

Hanoi expands safe agricultural supply chains

Hanoi has established 170 food safety chains, spanning from production to consumption and engaging businesses, cooperatives, and farmers.