Fewer Japanese firms in Vietnam expect 2023 profits

The number of Japanese firms in Vietnam expecting to make a profit this year has fallen 5.2 percent year-on-year to 54.35%, according to a Japan External Trade Organization (JETRO) report.

The global report released Monday presents the results of a survey of 14,018 Japanese firms with foreign investments, including 2,122 in Vietnam.

The 54.35% ratio is equivalent to 2021, the peak of the Covid-19 pandemic, the report says. In 2017-2019, the percentage of businesses expecting to make a profit was above 65%, higher than the ASEAN average.

The survey found that 21.2% of the respondents in Vietnam expected neutral outcomes and 24.4% expected losses this year.

Previewing 2024, 50.4% of surveyed firms expect the business performance would improve in 2024, 41.3% with unchanged outcomes, and 8.3% with worse outcomes.

Reviewing 2023, only 32% noted better performances, 32.3% with consistent results, and 35.7% with worse results.

Regarding sectors, 91.7% of entertainment-tourism firms expect better profits in 2024, the highest figures; followed by machinery-transportation with 75%; food with 72%; healthcare-education with 66.7%; and retail with 66.7%.

Popular reasons for worse performances are lower demand in export markets, lower demand in the domestic market, and competitiions with others in the sectors.

The survey also found 50.4% of surveyed firms expecting an improved business performance next year, 41.3% expecting unchanged outcomes, and 8.3% expecting to do worse.

In reviewing 2023, only 32% noted better performances, 32.3% recorded unchanged results, and 35.7% said they fared worse.

By sector, 91.7% of entertainment-tourism firms expected better profits in 2024, the highest figure; followed by machinery-transportation with 75%; food with 72%; healthcare-education with 66.7%; and retail with 66.7%.