The European Chamber of Commerce in Cambodia (EuroCham) has released its inaugural Business Pulse Survey, offering an in-depth analysis of Cambodia’s economic performance and business environment during the first half (H1) of 2024. The report highlights both the challenges and the optimism across key sectors, providing insights into revenue trends, sectoral performance, and market conditions.
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Positive Revenue Performance Amid Challenges
The survey reveals that 55% of respondents reported stable or above-target revenue performance. Leading sectors included Other Services (consulting, legal, and audit/accounting) and Agriculture & Food Processing, while the Financial Services sector faced significant hurdles due to tightening net interest margins and increased non-performing loans.
Despite these challenges, the business outlook for the second half (H2) of 2024 is optimistic, with many companies forecasting recovery and growth.
Key Sectoral Insights
- Tourism & Hospitality: Recovery has been sluggish, hampered by the absence of key demographics such as Chinese travelers. Experts suggest diversifying Cambodia’s tourism offerings and improving destination marketing.
- Real Estate & Construction: High construction costs and reduced lending have created barriers, but price corrections in Phnom Penh’s prime locations signal potential recovery opportunities.
- Consumer Products: Physical sales dominate, though digital payments are gaining traction, especially among younger consumers. Traditional shopping habits remain strong across the country.
- Agriculture: Challenges include low water availability, high export costs, and soil degradation. The planned Funan Techo Canal is expected to alleviate transportation challenges and enhance export capabilities.
- Financial Services: The sector is grappling with unfair competition and rising non-performing loans. However, recent regulatory adjustments, such as the National Bank of Cambodia’s Prakas on loan restructuring, provide hope for stabilization.
Business Sentiment and Net Promoter Score
Cambodia’s Net Promoter Score (NPS) stood at 6.51 out of 10, reflecting neutral sentiment among businesses about recommending the country as an investment destination. Comparatively, Vietnam achieved a higher NPS of 7.3, demonstrating stronger confidence in its business environment.
Market Trends and Outlook
- Economic factors such as declining consumer confidence and fluctuating demand were cited as the most significant external challenges.
- The majority of respondents anticipate revenue growth in H2 2024, with the Other Services sector expressing the highest optimism.
- Workforce expansion is a priority, particularly in the Financial Services sector, which expects notable hiring in the near future.
