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“This is an extreme year for the Latvian economy. Manufacturing is a relatively stable industry, but it also “produces” figures that make the eyes widen. Its growth of 4.1% in July compared to June is one of the fastest monthly growth ever. This helped the industry to get out of the minus zone. Year-on-year production increased by 1.8% in July. The sector is expected to improve further in August, and the September forecast is still good. But over the remaining months of the year, there is already a shadow of doubt, although in the case of industry it is not very gloomy, there are greater concerns about some service sectors, “banks believe”Luminor“economist Pēteris Strautiņš.
“A number of industries were able to return to growth compared to the previous year. However, the largest contributor to overall performance, more than other industries, was the largest player in manufacturing – wood products (excluding furniture) – where output grew at an unprecedented rate, namely: The sharp increase can be partly explained by the lower level last year, however, the total production in July, taking into account seasonality, was the highest since the beginning of 2019. The overall performance was also boosted by furniture manufacturers (output +10 The opening of do-it-yourself shops in the spring months in trading partners, as well as growing demand for furniture in Europe, boosted the performance of these industries, with more people spending more time at home and growing demand for digital solutions, as well as computer, electronic and optical equipment. “say”Swedbank“senior economist Agnese Buceniece.
“The chemical industry also continues to grow steadily (+ 13.7%), driven by growing demand for disinfectants. Equipment and machinery (+ 11.9%), furniture (+ 10.5%) and electrical equipment (+6 However, the development of manufacturing in July was negatively affected by the year-on-year decline in the production of finished metal products (-15.5%) and, due to the situation in the European automotive industry, cars and trailers (-16.6%). Due to the crisis caused by 19, production in these sectors has been declining since April. There were also small reductions in the production of textiles and non-metallic mineral products, ” Ministry of Economy Analyst of the Analytical Service Edmunds Gergelevičs. Overall, in the first seven months of the year, manufacturing output was 3.4% lower than a year ago (according to unadjusted data).
Looking at the likely industrial performance in the coming months, Bank of Latvia economist Agnese Rutkovska says that in the mood of industrialists is marked by resentment. After the boom in optimism in previous months – negligible in August, but it has deteriorated. And no wonder, most likely, this is only the first impetus for new challenges.
“In Europe, too, a number of different business sentiment indicators have deteriorated slightly in August. All this suggests that continued strong industrial growth in the coming months is unlikely, and further growth will depend on both the success of Covid-19 and the effectiveness of national economic support programs. , “summarizes the banks”Citadel“economist Mārtiņš Āboliņš.
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