Nearly 70 percent of German companies in Vietnam are pleased with their business results, while more than half of German investors consider increasing their investment in Vietnam next year, the AHK World Business Outlook Survey 2016 has found.
Conducted by the German Industry and Commerce in Vietnam (GIC/AHK Vietnam), the annual survey of business perspectives among German companies operating in Vietnam aims to track and evaluate business development and confidence of German companies in Vietnam.
More than half of the polled German companies were positive about the future of Vietnam’s economy and 47 percent expected further economic development in Vietnam. The AHK World Business Outlook was conducted by German Chamber Network worldwide.
It gathered feedback from about 3,400 German companies this year, with 23 percent of the German participants in Vietnam from industry and construction sectors, 58 percent from the services field and 19 percent from trading companies.
Basically, German enterprises are now seeking for investment opportunities and for further investment in Vietnam, because they see Vietnam as an attractive destination in terms of all integration encourages of Vietnam’s government (EU-VN FTA, TPP) and other location advantages of Vietnam”, says Marko Walde, Chief Representative of German Industry and Commerce in Vietnam.
According to the survey, German companies are more confident about the Vietnamese economy than China, India and other ASEAN countries. However, current economic policies, shortages of skilled workers and increased labour costs are among the hindrances to investment expansion by German firms in Vietnam.
Overall aggregated positive impression of the economic situation in Vietnam
More than half of the German companies are positive with the future of Vietnam economy and they (47%) expect a better situation of economic development in Vietnam.
Further investments in Vietnam with more labour demand for 2017
54% German investors saying that they consider increasing their investment in Vietnam next year and 58% will hire more employees for their investment plan.
Driving factors of future investments in Vietnam
Some factors may hold you back from increasing your engagement, such as economic conditions, skill worker shortage, increasing labour cost. Infrastructure and energy and commodity prices are developing in the positive way.
Comparison with other ASEAN countries, China and India
In Vietnam German companies are more confident with the economy and business development than in other ASEAN countries, in China or in India. It shows a very positive signal of the business confidence, outlook and expectations among German companies in Vietnam.
All these positive feedback of German companies as well as Vietnam’s location advantages are the results of Vietnam’s government encouragement in the past to integrate in the world economy (AEC, TPP, FTA Vietnam EU) and to improve the investment environment / infrastructure.
Vietnam should build a modern and practical vocational training system that meets the demands of companies in order to create a sustainable advantage to attract investors to the country.
Moreover, Vietnam should support Vietnamese company in increasing capacity to compete with companies from other countries as Vietnam joins ASEAN Economic Community, the Trans-Pacific Partnership and other free trade agreements.
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