(SaigonTimes) HCMC – Vietnamese businesses are most confident in Asia as shown in the latest survey conducted by HSBC to gauge the confidence of small and medium enterprises (SMEs) in 21 markets of HSBC worldwide.The semi-annual HSBC Small Business Confidence Monitor looks into the six-month outlook of SMEs on local economic growth, capital expenditure plans and recruitment. This is the sixth and largest survey to date, capturing the views of more than 6,300 SMEs across the 21 markets in Asia, the Middle East, Europe, North America and Latin America.
The results were used to calculate an index ranging from 0 to 200, where 200 represents the highest confidence level, 0 represents the lowest, and 100, neutral. The survey was done in May and June 2010 by research agency TNS at the request of HSBC Commercial Banking.
For the first time since the financial crisis, all Asian markets hold a positive outlook in terms of local economic growth, as well as their recruitment and investment plans. Asia has sustained its index level at 121 versus 122 in the fourth quarter last year, and Vietnam is the most confident country in Asia with an index of 164, followed by Singapore with 136, mainland China 123, and India with 121. Taiwan climbed six points from 97 to 103 to place in the positive territory for the first time since the financial crisis.
In terms of local economic growth over the next six months, the majority of Vietnam SMEs have a positive outlook, with 77% of local SMEs expecting growth to increase compared to the ratio of 71% in the survey by the fourth quarter last year. Meanwhile, 16% of enterprises surveyed expect economic growth to stay the same and only 7% expect growth to slow in the next six months.
Small businesses in Vietnam place great faith in Government policy as nearly half of respondents said they think Government measures are the key driver for local economic growth while the factor of domestic market’s rising demand is ranked second with 25%.
Up to 70% of Vietnam SMEs say they will increase their capital expenditure, rising from 66% in the previous survey, while 29% of them say they will maintain current levels and only 3% are planning reductions.
In addition, nearly 60% of local enterprises in the survey said they have planned to hire more staff, while 39% said to maintain the same staff base and only a minority of 3% said they would downsize their workforce.
In this sixth HSBC’s survey, the top barrier for Vietnam SMEs doing international business has changed from “unstable financial conditions” to “concern about dealing in foreign currencies”. For enterprises that don’t do international business, the top barrier or reason for not entering the international market is the complexity of certain international markets such as tax and foreign currency controls.
When being asked about the leading locations for international businesses, Vietnam SMEs seem to be in line with the global trend as they put China, Asia and Southeast Asia at the top.
Huynh Buu Quang, head of Commercial Banking of HSBC Vietnam, said in the statement that although there is a smaller increase in the confidence index when compared with the previous survey, Vietnam still remains at the top of the 21 markets surveyed.
“This shows that Vietnam small businesses, like other SMEs in emerging markets, still have a rosy view of the local economy, despite recent global economic uncertainty,” he added.
