The Report on Provincial Competitiveness Index (PCI) and Provincial Green Index (PGI) 2023 that were released on by the Vietnam Chamber of Commerce and Industry (VCCI) said that respondents to the survey have grown bigger in the last three years.

The percentage of firms belonging to the three smallest brackets all dropped last year, with the segment of foreign-invested enterprises (FIEs) with fewer than 10 individuals decreasing from 27.9 per cent in 2021 to 21.8 per cent in 2023, reflecting a potential move towards larger employment scales or fewer entries by small FIEs. Concurrently, the bracket of FIEs with a workforce ranging between 501 and 1,000 almost doubled from 3 per cent in 2022 to 6 per cent in 2023.

A similar pattern manifests when it comes to FIEs' equity size. The share of the smallest FIEs with under $150,000 (VND3 billion) dropped from 23.1 per cent in 2021 to 18.8 per cent in 2023. There has been substantial growth in the upper equity range – firms with more than $25 million (VND500 billion) increased from 4.5 per cent in 2022 to 6.2 per cent in 2023.

Last year, a PCI-FDI survey revealed a notable concentration of FIEs in the wholesale/retail sector, maintaining its position as the leading sector, similar to previous years. The continuous signals a persistent demand and a thriving commercial climate in Vietnam. According to the Ministry of Industry and Trade, the Vietnamese retail market is worth $142 billion and is projected to increase to $350 billion by 2025. Major retailers from Thailand and Japan aggressively expanded their operations in Vietnam in 2023.

Professional services emerged more prominently last year, suggesting a burgeoning market for expertise and specialized skills, a shift towards the knowledge-based economy. Despite significant difficulties owing to reduced orders from abroad and mass lay-offs in major foreign companies, the garment sector remained a significant player, reflecting Vietnam's historical strength in textiles. Computers and electronics continued to represent a substantial share, indicating sustained investment in Vietnam's technological manufacturing capabilities.

There was a rise in sales to both foreign individuals and enterprises in Vietnam, with sales to individuals more than doubling to 13.5 per cent, and enterprise sales increasing to 55 per cent in 2023. Perhaps the most striking figure was the substantial growth in exports, which leapt from just under 41 per cent in 2022 to 51.8 per cent in 2023.

This could be attributed to Vietnam's participation in key trade agreements like the EU - Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which have lowered trade barriers and opened up new opportunities.

In addition, shifts in global supply chains, including the ramifications of the US-China trade war, may have led companies to relocate production to Vietnam, thus boosting exports. According to the Foreign Investment Agency under the Ministry of Planning and Investment, investors extracted from China accounted for the highest number of new foreign-invested projects, with a total registered amount of more than $3 billion.

FIEs' reliance on local private suppliers has gradually increased over the years, with a notable jump to 75 per cent in 2023 from 63.3 per cent in 2022. Suppliers that are household businesses have also shown a marked increase, from 13.4 per cent in 2022 to 23.4 per cent in 2023. This encouraging trend could partially be attributed to efforts by local authorities to facilitate connections between foreign investors and domestic suppliers.