Manufacturers take on added disruption

Manufacturers are navigating the impediments causing supply chain disruptions during the ongoing Middle East situation.

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Last week, the European Chamber of Commerce in Vietnam (EuroCham) released the Business Confidence Index report for the first quarter of 2026. The index stands at 72.7 points, down 7.3 points from its recent peak of 80 points in the fourth quarter of 2025, reflecting a more cautious outlook.

With the prolonged conflict in the Middle East, energy and fuel price volatility has emerged as the most widely cited concern, affecting 75 per cent of surveyed businesses, followed by rising operating costs (61 per cent) and the risk of a slowdown in global demand (55 per cent). Altogether, 90 per cent of respondents identify cost pressures and geopolitical conflicts as the defining risks for the year ahead.

EuroCham noted that this shift highlights a broader dynamic shaping the business outlook for 2026. The challenge facing investors in Vietnam is no longer about whether opportunities exist, but rather how efficiently companies can capture them in an environment characterised by higher costs, supply chain adjustments, and greater operational complexity.

Xavier Depouilly, general manager of DXL Research and Consulting, which conducted the EuroCham report, said, “Companies that are more exposed to international supply chain, particularly those trading directly with the Middle East, feel the pressure the most acutely. A good balance between Vietnam and relatively more stable markets, such as Europe, can act as a stabiliser for investors against geopolitical shocks.”