Processing and manufacturing firms expect to perform better in Q2

Meanwhile, 10.6 per cent said production and business are going to be more difficult.

The predictions are based on a survey conducted by the GSO of more than 6,500 processing and manufacturing firms in 63 cities and provinces nationwide.

About 91.3 per cent of foreign direct investment (FDI) enterprises in the processing and manufacturing industry were optimistic that their business situation in the second quarter would be better and more stable than in the first.

Around 88.8 per cent of non-State businesses and 86.8 per cent of State-owned enterprises also expressed optimism.

The GSO reported that 55.7 per cent of enterprises expected production output to increase in the second quarter while 10.3 per cent of them predicted it would decrease compared to the first quarter.

Production output was expected be highest in the FDI sector, followed by non-State firms and then State-owned enterprises.

About 51 per cent of the enterprises estimated they would receive more orders in the second quarter, while 9.6 per cent said they would receive fewer.

The office pointed out the labour force tends to increase in the second quarter compared to the first quarter, when 22.3 per cent of businesses forecast number of workers would increase. About 7.8 per cent forecast the number would decrease.

It also said several factors affect business and production activities, including the competitiveness of local goods, low domestic demand and financial difficulties.

The competitiveness of domestic goods is still the most influential factor in production and business activities. Up to 59 per cent of the businesses said competition affects production and business activities. About 45 per cent of the businesses believed domestic demand was low while 31.5 per cent of enterprises said they faced financial difficulties.

Meanwhile, 31 per cent of the enterprises said they could not recruit workers to meet their requirements, affecting their ability to develop their production and business.

Twenty-eight per cent of the enterprises said interest rates were high and 24 per cent faced shortages of raw materials and fuel that affected production. Around 22 per cent of the enterprises had outdated technology and equipment.