German firms optimistic about Vietnam market – survey


A recent survey showed 70% of German firms in Vietnam are pleased with their sales and earnings results while 50% are upbeat about their business operations in the middle term.

Nearly 70% of German companies in Vietnam perceive their general business situation as good, according to the AHK World Business Outlook Survey 2016, which was conducted in March by German Industry and Commerce in Vietnam (GIC/AHK Vietnam) and aimed at providing a barometer to track and evaluate the business development and business confidence of German companies in Vietnam.

Overall, the firms have a good outlook of Vietnam’s economic situation in the middle term. More than half of the respondents are positive with the future of the Vietnamese economy and 47% expect an improvement in economic development.About 58% of the firms surveyed hold a positive business outlook while a similar percentage of respondents say they consider increasing their investment next year (with 54%) and will hire more employees for their plan (with 58%).

German firms are looking for investment opportunities in Vietnam because they see Vietnam as an attractive destination, said Marko Walde, GIC/AHK Vietnam chief representative. Vietnam has signed the Trans-Pacific Partnership (TPP) trade pact with 11 other Pacific Rim nations, and concluded negotiations over a free trade agreement with the EU (EVFTA).According to the survey, German companies are more confident with the economy and business development in Vietnam than in other ASEAN countries, China and India. “It shows a very positive signal of the business confidence, outlook and expectations among German companies in Vietnam.”

However, current economic policies, shortages of skilled workers and rapidly increasing labor costs are seen as hindrances to investment expansion by German firms in Vietnam, the survey found.GIC/AHK Vietnam suggested Vietnam build a modern and practical vocational training system that meets the demands of companies in order to create a sustainable advantage to attract investors.The Government also needs to support local businesses in competing with their rivals from other  countries as Vietnam  now joins the ASEAN Economic Community (AEC), TPP and other free trade agreements, it said.

The annual AHK World Business Outlook was conducted by the German Chamber Network worldwide. This year, the survey gathered feedback from about 3,400 German companies globally. Of the participants in Vietnam, 23% are from the industrial and construction sector, 58% from the services area and 19% from the trading sector.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, as of late April, German firms had registered over US$1.35 billion for 264 projects, making Germany the 21st largest foreign investor in Vietnam.


Photo: CBR Investment AG