As 2023 unfolds, the Vietnamese business landscape presents a compelling narrative. A recent wide-ranging survey presents crucial insights, shedding light on the prevailing situation and what the remaining months of 2023 may entail.
Operating Status
A sizable 71.2% of businesses continue to operate, albeit amidst various obstacles that affect their functioning. Labor size expectations reflect a mixed bag: 22.2% of businesses predict a labor size reduction by over 50%, in contrast, 24% plan to boost labor size by 21-50%. Moreover, 25% and 29.4% of businesses project a decline in labor size and revenue by 5-20% and over 50% respectively. On the brighter side, a revenue increase of 21-50% is anticipated by 30.7% of businesses, signifying some resilience in these challenging times.
Considering revenue size is at 80.7%, the forecast is for businesses to reduce their scale by 5% or more, indicative of a cautious stance towards business expansion.
Economic Outlook
The macroeconomic prospects of Vietnam are under close examination, with a significant 81.4% of businesses expressing a negative or very negative outlook for the rest of 2023. Similarly, 83.7% forecast the industry’s economic prospects for 2023 as negative or very negative. The Construction Industry, Micro small, Non-state, Businesses in Ho Chi Minh City have shown particular concern.
Impending Challenges
Businesses are facing a plethora of issues. 59.2% report facing difficulties in orders, and 51.1% experience challenges in loan access. Additionally, 45.3% grapple with administrative procedures and legal compliance, while 31.1% face criminalization risk in economic transactions. These figures underline the need for comprehensive interventions to tackle these hurdles.
Local Government Support
The efficacy of the local government’s management and support is under question, with an overwhelming 84% of businesses rating it as ineffective. Key areas of focus for recommendations include reducing costs, enhancing competitiveness, improving market and loan access, and nurturing a more positive investment and business environment.
Overall Assessment and Future Expectations
The business forecast appears bleak. A striking 82.3% of businesses expect a poor production and business outlook for the latter half of 2023. Anticipated outcomes range from downsizing (59%), temporary business suspension (12.4%), to outright business closure and dissolution (10.9%).
The Vietnamese business climate is currently undergoing significant flux, creating a blend of challenges and opportunities. Buyers interested in sourcing Vietnamese products should be cognizant of this dynamic environment and make decisions accordingly. This landscape also prompts a call for strategic interventions to bolster business resilience and stimulate economic recovery.
