HSBC survey: Vietnam SMEs more confident in 2009
This latest survey included, for the first time, the Middle East and Latin America.
Across Asia, all eight markets comprising Hong Kong, mainland China, Taiwan, Malaysia, Indonesia, Singapore, Vietnam, and India in the survey show an increase in business confidence in the SME sector compared to six months ago, said HSBC.
The foreign bank’s semi-annual survey of the small business sector reflects the views of more than 3,400 SMEs in 12 markets across Asia, Latin America and the Middle East.
Respondents were asked about their six-month outlook on economic growth, capital investment plans, recruitment plans and trade. The results were used to calculate a monitor ranging from 0 to 200 where 200 represents the highest confidence level, 0 represents the lowest and 100 neutral.
The survey was conducted in May and June 2009. There were 300 Vietnamese enterprises, which have annual turnover of less than US$10 million each, participating in the survey.
The regional index rose from 92 in the fourth quarter of 2008 to 107 in the second quarter of 2009. Vietnam’s business confidence is at 150, increasing 19 points from six months ago, the highest index score in Asia in the survey.
Following Vietnam is India with a score of 128. Although having the biggest index rise with 33 points, Hong Kong remains at the lowest rank in Asia with the score of 83.
In Vietnam, the survey showed SMEs are starting to take action in line with their optimism. They are more willing to increase capital expenditure and recruitment plans in the next six months.
In terms of local gross domestic products (GDP) growth, Vietnam maintains its position as the most optimistic in Asia, with 62% of SME respondents expecting faster GDP growth while 22% of Vietnam SMEs expects growth to decline in the next six months and 27% expect the same pace.
In Vietnam, very few businesses are planning to shrink capital expenditures compared to six months ago, as only 3% of respondents say they would cut spending, 38% to maintain the same level as last year and up to 58% say they plan to increase capital expenditures.
The survey shows the majority of small businesses are holding steady on staff levels. Very few SMEs plan to cut jobs and Vietnam ranks the highest in terms of recruitment plans, with 49% of respondents showing intention in hiring staff, 47% will retain the same staffing levels and only 4% plan to cut jobs.
Small companies that engage in cross-border business were asked about their expectations on trade volumes for the next six months. Those in Vietnam who trade with China are the most optimistic, with 58% expecting growth in trade volume.
The outlook for growth in trading with the rest of Asia is brighter than with the U.S. (54% versus 49%). Among those who trade with Europe and the rest of the world, the outlooks are the same with 41% expecting an increase.
In the statement from HSBC, Derrick Ragland, HSBC’s global head of Business Banking, said: “The global economy is rebalancing towards the emerging markets and SMEs are fundamental to this growth story. HSBC is fully committed to supporting the domestic and international needs of SMEs in these strategically important economies.”
HSBC now serve more than 2.6 million small business customers around the world. In Vietnam, it is widening network after receiving the local incorporation license to access more corporate clients which is the target segment of HSBC in the country.
