The confidence of European businesses operating in Vietnam is showing indications of resilience, as per the most recent Business Confidence Index (BCI) from the European Chamber of Commerce in Vietnam (EuroCham).

However, although the uptick highlights a progressive stabilisation, the BCI has remained under the midpoint since Q4 last year.

Indeed, one third of businesses forecast a degree of underperformance, underscoring a cautious outlook amid ongoing weaknesses in the market.

“There's definitely a positive trend underway. While we still have a long way to go for a full recovery, businesses are feeling more hopeful. The European business community is increasingly optimistic that the most challenging economic period is now behind us,” said EuroCham Chairman Gabor Fluit.

Furthermore, although there was a two-percentage point decline in overall optimism for economic stability and growth between Q3 and Q4 last year, this was countered by a 14-percentage point drop in economic downturn forecasts, Vietnam News reports.

Indeed, the country’s business sector is poised for growth. A total of 31% of businesses are planning to increase their workforce in the current quarter, whilst 34% are aiming to increase their investments, a considerable rise over 2023.

In addition, in Q4 last year, 62% of businesses surveyed ranked Vietnam among their top 10 global investment destinations, whilst 17% put the country at the top. This is coupled with 53% of respondents expecting increased foreign direct investment in the country by the end of Q4.

The survey also underlines Vietnam’s position in the ASEAN region, with 29% ranking the country amongst the 'top competitive countries' in ASEAN. Additionally, 45% see Vietnam as a competitor, although recognising certain challenges.

“Confidence among the foreign business community in Vietnam is clearly on the rise. New data for 2023 support this. Last year, foreign direct investment reached US$36.61 billion, jumping 32.1% from 2022. This is a clear illustration of growing faith in Vietnam’s economy,” the EuroCham Chairman added.