Survey finds business optimism high in Vietnam

Enterprises in Vietnam are the fourth most optimistic as over two-thirds of the respondents expressed their high optimism about the country’s outlook, according to a survey just released by the researcher Grant Thornton Vietnam. Grant Thornton’s survey shows up to 72% of the respondents expressed their high optimism about Vietnam alongside with Chile, India and Brazil, well compared with emerging markets and global averages of 57% and 24% respectively. The optimism among businesses in Vietnam surges from 31% last year but still lags behind the 87% observed in the report of Grant Thornton International in 2008, the foreign-owned audit and business advisory services firm said on Wednesday. Regarding revenue prospects for the next 12 months, the survey finds businesses in Vietnam are most optimistic, with 95% expecting an increase in their earnings compared to an emerging markets average of 59% and a global average of 40% respectively. Optimism regarding profitability and employment are also the highest, registering 91% and 60% respectively in this year’s survey with more than 7,400 chief executive officers, managing directors and senior executives in medium to large private-held businesses in 36 economies. Grant Thornton said in the survey that Vietnam had a good supply of semi-skilled, low cost workers while literacy is high, approximately at 96% of the country’s population of some 86 million. In addition to higher political stability than in many of its neighboring countries, Grant Thornton said the Vietnamese Government had taken steps to make Vietnam attractive to the right investors, and by attempting to cut bureaucracy. “The Government is trying hard to streamline bureaucracy. An example of this is Project 30: reviewing registration procedures and approvals with the overall aim to reduce the amount of regulation and red tape,” Ken Atkinson, managing partner of Grant Thornton Vietnam, said in the report. But, Grant Thornton called for investors to make use of local advisers and take time to check the background of potential business partners and understand the business environment. Grant Thornton noted laws were changing rapidly in Vietnam. The country’s economy has become more open in recent years and increasingly diversified, although agriculture still accounts for more than one-fifth of total output. The survey ranks Vietnam 16th in the 2010 emerging markets opportunity index after mainland China, India, Russia, Mexico, Brazil, Turkey, Poland, Malaysia, Indonesia, Thailand, Argentina, Hungary, Iran, Chile and South Africa. The survey indicates financial constraints as the greatest concern to businesses in Vietnam regarding their ability to expand operation as Grant Thornton pointed out in another report released weeks ago. The latest survey shows the cost of finance and shortages of working capital are of more concern to businesses in Vietnam than anywhere else in the world. “By means of comparison, financial concerns are cited as major constraints by around 20% more businesses in Vietnam than the emerging markets average. Poignantly, businesses in Vietnam rate their lenders as the fifth least supportive in the world: just 49% class lenders as supportive of their business,” the report says.