Some 40,300 companies shut up shop in the first quarter, a year-on-year increase of 16 percent, according to the General Statistics Office of Vietnam. 

A woman walks past a shop with a sign saying "temporarily closed" on Hanoi's
Chua Boc Street in August, 2020. Photo by VnExpress/Ngoc Thanh.

Around 23,800 are temporarily closed, up 28.2 percent, and more than 5,000 have permanently ceased to do business, a 26.4 percent increase, while 11,300 others are completing dissolution procedures.

The majority are small, newly-established companies that were vulnerable to the impacts of the Covid-19 pandemic.

Some 29,300 enterprises were established during the quarter, down 1.4 percent, and 14,700 others resumed operations after temporarily closing.

A survey of the manufacturing sector by the GSO found 68.6 percent of firms saying their business situation is better than in the previous quarter, and 85 percent believing it would improve next quarter.

The majority said strong competition was the main factor affecting their business. Other factors included low demand, resource crunch, raw material shortage, and lack of human resources.

Only 27.8 percent of firms reported an increase in the number of domestic orders from the previous quarter, and 25 percent said there was an increase in exports.