The world economic picture presents bright colours in late 2013 and early 2014, highlighted by confidence in continued strong recovery in major economies such as the US and Japan, by hopes of a smoother path for the European economy, and by optimism about faster growth prospects in emerging economies. Not diverting from that flow, the Vietnam economy is believed to have recovered from the bottom of crisis in 2013 and to have a higher growth rate in 2014.
According to a survey with more than 3,000 enterprises who also took part in FAST500 and VNR500 ratings, conducted by Vietnam Report Joint Stock Company (VNR), large-scale and fast-growing enterprises in Vietnam are optimistic about business prospects in 2014.
In 2014: Business recovery begins
Better results in 2013 gave a new ray of hope for businesses. The ratio of companies with higher annual revenue taking part in the survey in January 2014 is significantly higher than that in a similar study in January 2013. In the survey in January 2013, more than 65 percent of respondents said their revenue in 2012 was higher than that in 2011. Nearly 13 percent said with worse results than in 2011. In early 2014, up to 82 percent of enterprises taking part in the survey said their 2013 revenue was higher than that in 2012 and only 6 percent reported worse revenue than the previous year.
Good business results in 2013 boosted confidence and hope for enterprises in 2014. They also expressed optimism about business prospects in 2014. In the survey into big enterprises in January 2014, nearly 86 percent of respondents expected an increase in revenue in 2014, while only less than 5 percent expressed fears of a possible decline.
Always considered an important resource for enterprises to attain sustainable growth, employees are expected to increase in 2014 (accounting for 57 percent of businesses surveyed). It is also the hope for the Government because it helps reduce unemployed workers and ease social security burdens.
Many companies said they can increase revenue without employing more workers. Obviously, they learn valuable experience from the recession to increase revenue without adding costs, thus enhancing their business operating efficiency.
Enhancing governance efficiency, improving after-sales service and customer relations quality, and expanding the domestic market are three major contributing factors to revenue growth of big business in recent years. As many as 87.3 percent of respondents said "Enhancing management efficiency" plays a leading role in revenue growth in 2013. In addition, measures to improving after-sales service and customer relations quality and expanding the domestic market are chosen by nearly 70 percent of respondents with revenue growth as secondary growth contributors. Only 9.7 percent believed that lifting up prices of products and services is a means to bump up their revenue in 2013. Enterprises also realised the importance of the "quality" to revenue increase, which may lead to significant changes in strategic thinking and abandonment of short-term goals to head for sustainable growth in the future. This is also reflected in investment priorities of enterprises.
In 2014, up to 63.79 percent of enterprises interviewed said they will continue to invest to improve the quality of customer services, followed domestic and foreign market expansion (59.77 percent) and human resource development (51.17 percent).
Mineral, petroleum, steel and construction material firms are the most optimistic
Mineral - petroleum, metal - steel and building material companies are more upbeat about their industry prospects in 2014. The proportion of companies of these three industries that said their industries will have better performance in 2014 than in 2013 is higher than the proportion of other industries and in the overall proportion. Contrary to the 2013 survey, financial and banking firms were less optimistic about their industry prospects than other industries in 2014. In the 2013 survey, financial and banking firms were very upbeat about their industry prospects.
If the optimism of petroleum - mineral companies rooted from their stable revenue in recent years, it seemed that metal - steel and building material companies placed their expectations on their effect of Trans-Pacific Strategic Economic Partnership Agreement (TPP).
According to survey results, most companies were afraid that changes in the government’s macroeconomic policies, inflation, rising fuel and input costs would affect their business results. These were considered domino-effect and unpredictable factors.
Therefore, most companies put hopes on macroeconomic stability in 2014. According to VNR500 companies (500 largest enterprises in Vietnam), the Government needs to give immediate priority to macroeconomic stability (65.52 percent of respondents), simplify and reduce administrative procedural burdens (64.94 percent), and strengthen business support like credit support packages, investment incentives and tax incentives (63.22 percent).
After struggling with the crisis, Vietnamese businesses have learned great lessons to grasp golden opportunities when Vietnamese and world economies are on recovery track. Businesses are more confident and ready to face challenges in 2014. This confidence is a good sign for the new fiscal year and perhaps with this belief, enterprises will become brave soldiers to lead Vietnam to a growth miracle as earlier.
Phung Hoang
Vietnamese
