The Vietnam Business insight Survey (VBiS) of 700 firms across the country registered a plus seven point index for 2014, a gigantic leap from minus 21 points for 2013, revealing a dramatic leap in confidence among the business community.
According to VBiS results, 42.5% of the respondents said they would expand their business in 2014, 50.7% will maintain their current size while just 6.7% will scale down production. Only a miniscule 0.1% was preparing to halt operations.
Businesses claimed they will expand operations due to a favourable economic outlook (40.1%), the availability of low-cost skilled labour (40.1%), tax incentives (29.6%) and greater market openness (28.2%).
“Companies expect greater changes in the labour market as they believe they will be able to recruit good quality local labour for even important positions for the first time”, said VCCI representative Doan Thi Quyen.
VBiS also showed up to 44.3% of the surveyed businesses suggested the government boost the development of support industries to help them raise the added values of their products.
The survey also pointed to the fact that 65.2% of the respondents said they were interested in taking bank loans, compared to 57.3% in 2012.
“Demand for bank loans has tended to increase, which is a positive indicator for the economy”, Quyen said.
In 2012, up to 74.9% of the businesses took a bank loan at an annual interest rate of 12% or more, while the number of such firms declined dramatically this year, to 32.7%.
When questioned on the efficiency of the government’s solutions to ease business difficulties, 60% of the respondents rated the efficiency of the policies as medium, while 40% said it was a low level.