Over 60% of US firms will not consider shifting production out of Vietnam
A flash survey by the American Chamber of Commerce in Vietnam revealed that while many US companies' operations in Vietnam have been affected significantly by the pandemic, the majority do not want to shift production out of Vietnam.
|The faith of more than half of US companies in Vietnam has been unswayed by the pandemic.|
The American Chamber of Commerce in Vietnam (AmCham Vietnam) has recently conducted a flash survey on August 23-25 after its earlier survey on August 3-5. The results show that as of August 25, 13 per cent of respondents reported that their companies had ceased operations or had only skeletal staff, with nearly 50 per cent operating at under 50 per cent of normal capacity. Meanwhile, 20 per cent of American companies have already slashed operations by 51-75 per cent due to the pandemic.
Meanwhile, 61 per cent of respondents reported roadblocks were the top inter-provincial policy concern, with another 24 per cent reporting lack of understanding of essential products. Inconsistent application of policies among provinces has caused serious disruptions to supply chains and prevented workers from getting to work sites or returning home.
Due to the challenges, 20 per cent of respondents have already shifted some production, with another 16 per cent having discussions underway. However, up to 66 per cent of respondents have not even considered shifting production to other countries. This reflects Vietnam's growing importance in the global supply chain of US businesses.
According to the flash survey, AmCham Vietnam members reported a sharp uptick in vaccination rates, with almost 50 per cent stating that most or all of their staff had been vaccinated (with at least one dose) versus 25 per cent in a similar survey just three weeks before.
Vaccinations remain a key concern affecting the continuity of operations and supply chains, as reported by 80 per cent of respondents, followed by 72 per cent citing restrictions in transportation. Vaccines are also seen as the key element of a roadmap for safe reopening and economic recovery, reported by 85 per cent of respondents.
In addition, the most pressing concern of AmCham members and their families, reported by 73 per cent, is “worries about poor and disadvantaged, who are impacted even more severely”. That was even higher than the 71 per cent responding “concern about quality of care if you or a family member developed serious symptoms”.
The US is Vietnam’s largest export market and a close partner on global health security, having already provided six million doses of vaccines to Vietnam, while Vietnam is a growing destination both for US investment and exports.
AmCham Vietnam represents over 550 corporate members and 2,000 individual business representatives, billions of dollars in investment, more than 30 per cent of Ho Chi Minh City’s exports, tens of thousands of direct and over a million indirect employees throughout Vietnam, and a significant percentage of tax contributions. Together with its Hanoi branch, AmCham Hanoi, AmCham represents over 650 corporate and over 2,500 individual business members.
US recovery ripple effect for Vietnam
Along with many nations, the US economy is recovering, leading to a rise in the demand for goods imported from Vietnam amid the two economies witnessing their heyday in bilateral trade and investment ties on the back of various motives,