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“The impact of the pandemic is very different in different sectors of the economy. Some are in serious crisis and companies are worried about survival, while others have felt little weaker this year and have recovered relatively quickly. The former is mainly the services sector. Social distancing, both in terms of the restrictions imposed and the caution of the population, has led to a shift in consumption from services to goods, and the desire to improve / repair housing is higher than before the pandemic. Electronics the industry is benefiting from digitalisation, which has been further exacerbated by the pandemic. This is good news for manufacturers of goods, “considers”Swedbank“senior economist Agnese Buceniece.
Unlike the spring, when the initial outbreak of Covid-19 and national measures to curb its spread led to a general decline in consumption, as well as disruptions in production chains, consumption has now fallen only slightly. However, the structure of consumption is changing, and spending on services is declining, while demand for various goods is growing. Such a rotation of demand from goods to services is observed both in Latvia and in other European and world countries. This, of course, creates demand in the manufacturing industry, and therefore banks “Citadel“Economist Mārtiņš Āboliņš is positive about the prospects of Latvian industry in the next 3-6 months. The biggest threat to Latvian industry at the moment is not a general drop in demand, but Covid-19 outbreaks in some manufacturing companies, as a result of which companies are forced to suspend operations.
In the first ten months of this year, the manufacturing industry as a whole showed a decrease of 2.5%, Ministry of Finance notes is the best performance among the Baltic States, as well as one of the best results in the entire European Union. Although the growth rate of Lithuanian manufacturing in October was higher than in Latvia (+ 2.5%), in ten months the sector as a whole has shrunk slightly faster – by 2.8%. In Estonia, too, manufacturing grew slightly more strongly in October than in Latvia (+ 1.6%), but in ten months the sector has shrunk more than twice as fast as in Latvia – by 5.8%. In the European Union as a whole, manufacturing output fell by 10.7% in nine months (10-month data not yet available).
“The incentives and conditions to stay afloat are a resumption of international trade, while depleted stocks in recent months will create the conditions for further growth in the sector. The recovery will be hampered by a second wave of infection. However, the outlook is quite optimistic,” he said.SEB bank “economist Dainis Gašpuitis.
“Overall, next year’s opportunities look good for producers, but they have to go through a difficult time at the turn of the year. More and more companies are reporting that they are forced to reduce production capacity due to quarantine. Restrictions on socialization reduce opportunities for services, but the most important export sector benefits. please follow them, “calls the banks”Luminor“economist Pēteris Strautiņš.
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