EuroCham: Vietnam remains a strategic anchor amid global volatility.

EuroCham’s latest Business Confidence Index (BCI) report reaffirms Vietnam’s long-term appeal amid global volatility, with confidence easing in Q1/2026 but remaining well above historical levels.

BCI overview: confidence dips but stays resilient

On April 15, EuroCham published the Q1/2026 BCI report prepared by DXL. The report examines investors’ internal structure and highlights institutional reforms expected by investors under Vietnam’s new government to sustain long-term growth.

Vietnam’s BCI scored 72.7 points in Q1/2026, down 7.3 points from the Q4/2025 peak of 80. EuroCham said the decline does not indicate a negative trend, noting the score remains above the four-year average, reflecting Vietnam’s resilience as a stable link in global supply chains.

Cause: geopolitics and trade policy shifts

The report attributes the modest fall in confidence to rising geopolitical tensions in the Middle East and changes in major economies’ trade policies. Investor sentiment has shifted toward a more cautious and pragmatic stance.

Despite the softer outlook, the report highlights strong continuity in investment promotion: 93% of European business leaders said they will continue promoting Vietnam as an attractive investment destination, the highest benchmark in EuroCham’s survey history.

EuroCham President Bruno Jaspaert said the current global environment resembles “a voyage through rough seas,” with Middle East tensions weighing on energy prices and forcing supply chains to pivot.

Development: sector and firm-size differences

BCI volatility reflects how sectors and firm sizes respond to risk. Confidence is closely tied to a firm’s ability to absorb shocks and the specifics of its business model.

Service sectors, particularly travel and hospitality, remain buoyant, with a confidence index of 81.7 points, supported by robust domestic demand and the return of international visitors following visa-relaxation policies.

By contrast, agricultural and food value chains recorded a sharp 19.4-point decline, linked to input inflation pressures and bottlenecks in international logistics.

By headcount, large firms with more than 50 employees remain solid, supported by financial buffers and flexible governance. Smaller firms, especially those with 11–25 employees, face more difficulty as confidence falls to 65.5 points, which analysts attribute to fewer resources to absorb cost shocks.

Data and analysis: market orientation and exposure to risk

The report also finds a clear link between market orientation and optimism. Firms focused on the domestic market report confidence of 77.4 points, above the overall average. Firms more deeply integrated into global supply chains, or with direct trade ties to volatile regions such as the Middle East, show lower confidence.

DXL CEO Xavier Depouilly said the differentiation reflects varying capacity to navigate a slowing economy. He noted domestic-oriented firms are leveraging macroeconomic stability, while a balanced strategy between Vietnam and more stable regions such as Europe could help act as a “shock absorber.” He also said tempering near-term growth expectations for some exporters is understandable given tariff barriers and uncertain shipping costs.

Impact: gap between expected and realized activity

While sentiment remains positive, EuroCham reported a gap between expectations and outcomes in Q1. 69% of firms anticipated positive activity, but the realized figure was 56%, a 13-point gap. EuroCham said this does not necessarily signal a downturn, citing longer contract cycles and higher-than-expected operating costs.

Internal challenges identified by the survey include:

• Administrative bottlenecks: 61%
• Unclear or inconsistently applied regulations: 51%
• Tax administration hurdles: 44%
• Talent shortages and workforce volatility: rising from 23% to 33%

Outlook: reforms and growth support confidence

EuroCham said businesses value government efforts to simplify visa procedures and work permits for foreign professionals. It also pointed to political stability under Party and State leadership and the new government’s emphasis on private-sector-led growth, referencing Resolution 68-NQ/TW on private-sector development.

Investors cited Vietnam’s GDP growth of 7.83% in Q1 as persuasive evidence of internal financial strength and economic resilience.

Looking ahead, EuroCham expects to translate business feedback into policy solutions through the White Paper Dialogue Week, involving its 20 sector subcommittees working with ministries to remove bottlenecks in infrastructure, logistics, and legal clarity. Streamlining administrative procedures and accelerating decision-making were highlighted as key to maintaining Vietnam’s ability to attract high-quality foreign direct investment (FDI).

Bruno Jaspaert said Vietnam is entering “an era of strong opportunities,” adding that EuroCham members distinguish between immediate operational barriers and long-term “incentives” for the future. He noted that with more than 90% of firms willing to promote Vietnam as an investment destination, the market’s core value has been reaffirmed.