In the last year compared to 2014, output in the manufacturing industry fell by 1.2% according to calendar-adjusted data.
Unfortunately, growing exports could not compensate for deceasing domestic consumption. At local market, the decline was 5.4% while the export demonstrated growth of 4.1%, which was primarily due to an increase by 25.8% in deliveries to the euro area. However, sales in countries outside the single currency area fell by 7.4%.
It can be apart noted that while the year 2015 started well, it ended for the manufacturing industry if not badly then on a rather sad note. Thus, in December compared to November, the manufacturing industry turnover decreased by 1.4% in current prices. Compared to December 2014, the reduction is 1.6%.
A small consolation is only that a similar situation is observed in the manufacturing industry of both Estonia and Lithuania. That is, in terms of processing Latvia is not an economic “loser” among Baltic States.
It should also be noted that the above figures are the average temperature of the whole manufacturing industry in Latvia, which is composed of successes and failures in individual industries.
For example, one of Latvian economy flagships - woodworking. Last year, turnover of largest woodworking enterprises was about 350 million euros, or by 0.3% more than in 2014. Export decreased by 0.6% - down to 250 million euros.
Decline in exports is associated with great losses of Kronospan Riga company on Russian market. It is a very big world concern that was focused at markets of Eastern countries, and the situation in Russia over the last year forced to significantly reduce the export of the company products.
Another one of pillars of the manufacturing industry - metalworking – finished the last year with an increase in turnover of 2%. But, the positive balance only appeared due to renewed activity of JSC KVV Liepājas metalurgs. Earlier this year, this metallurgical company suspended its work, which has a negative impact on 2016 statistics.
It is too soon to guess to what extent negative. One thing is clear: situation in world steel industry has changed dramatically. Today China produces more than 50% of all steel in the world while as recently as few years ago the share of China was only 10%. This affects also the prices and production volumes in Europe. As for Latvian sales market, there is a decline in the construction industry being the main consumer of metal products.