Confidence propels firms forward

A survey conducted by the US-based World Vest Base Financial Intelligence Service (WVB FISL) and PetroVietnam Finance Investment and Consultancy Company (PVFC Invest) shows the business confidence index in 2010’s third quarter rebounded three points after declining four points in the second quarter.

The survey was carried out from September 15 to the first week of October, 2010, involving 262 companies, primarily domestic private small- and medium-sized enterprises, across 11 primary sectors and industries in Vietnam.

According to the survey, 59.16 per cent of businesses expected to increase the number of employees and keep investing in fixed assets over the next 12 months. Only 3.05 per cent thought they would narrow recruitment, but 37.79 per cent thought their payrolls would remain the same over the next 12 months.

Vietnam Association of Small and Medium Enterprises chairman Cao Sy Kiem said bullish Vietnamese economic data and the ongoing global economic recovery made domestic enterprises believe that the prospects were better.

The economy expanded 7.16 per cent year-on-year in the third quarter, raising economic growth since January to September to 6.52 per cent against the same period last year. The government expects the economy will expand 6.7 per cent this year.

“Enterprises want to expand their businesses because they see a rising demand in international and domestic markets,” said Kiem.

Vietnam’s export turnover hit $51.5 billion, up 23.2 per cent year-on-year and four times higher than the target set by the National Assembly, according to the General Statistics Office. The Ministry of Industry and Trade forecasted that export revenue will reach $69 billion this year, up 21 per cent against last year.

Meanwhile, total domestic market retail sales in September rose 24.5 per cent year-on-year.

Vietnam Young Entrepreneurs Association chairman Vo Quoc Thang said though enterprises faced big challenges like high lending interest rates, from 12 to 15 per cent per year, and increased prices of input materials, they were optimistic about the future.

“Many members of our association are preparing for investment and business expansion,” said Thang.

The survey shows that 84.35 per cent of enterprises expect the overall economic conditions will be better over the next 12 months, while none were worried about a dismal economic twist.

The brighter outlook is also mirrored by more domestic enterprises expecting high profits. About 74.05 per cent are confident their revenues will increase and 72.52 per cent of businesses believe their profits will increase over the next 12 months. Only 1.91 per cent and 3.82 per cent of enterprises are worried about a shrink in their revenues and profits, respectively.