Local business optimism ranks third in the world

While releasing its 2008 International Business Report 2008 in Vietnam on Monday, the research company announced that 87 percent of local private businesses were optimistic about the year ahead.

 This is the first year Vietnam has featured in the survey.

The report examined the attitudes, plans and trends of 7,800 privately owned businesses in 34 countries across six continents. The high level of optimism in many Asian countries reflected sustained vigorous economic progress and the view that these economies are largely insulated from the effects of slower growth and credit problems affecting the world’s more mature economies, according to the report.

The report said India topped the optimism charts, at 95 percent optimism, for the fifth consecutive year while the Philippines filled the number two spot for the first time.

Japan took this year’s bottom place with only 49 percent of its businesses optimistic about the future. Only 39 percent of East Asian businesses were optimistic this year, compared to 54 percent in 2007, according to the report.

Vietnamese private businesses were the most optimistic about their revenue prospects in the survey, said the firm, adding that the country was followed by mainland China and Brazil in that category.

“Vietnam’s economy has been growing strongly for the past decade, with expectations still very positive for the future despite the global slowdown and credit issues that have arisen this year,” said the survey.

Grant Thornton said local businesses also had the highest expectations for employment growth in 2008. While 83 percent of Vietnamese businesses expected job growth this year, only 77 percent thought the same last year and only 40 percent of East Asian companies were optimistic about employment this year. Only 33 percent of all companies surveyed expected employment growth.

About 54 percent of surveyed Vietnamese businesses cited the availability of a skilled workforce as the main constraint restricting their expansion, said the survey.

The total for East Asia was 37 percent in the same category while the global rate was only 35 percent.

More than half the Vietnamese firms also cited the cost of finance as the second major constraint, compared to just 27 percent globally.

However, the firm said Vietnam ranked low in its emerging market index, less attractive than Malaysia, Indonesia and the Philippines even though foreign investment has been growing significantly in the country.