Two years of going around in circles gave way to growth: in the last year, Latvia’s processing industry has increased its production volumes as a whole by 4.1%.
However, it is the average temperature in the hospital. Some industries demonstrated a rapid rise, the other ones – a sharp drop.
Thus, the woodworking could retain enviable growth rates for the second consecutive year (6.9% in the last year, 7.1% in 2014). The decline was also recorded in the field of clothing manufacture (-15.6%), non-metallic mineral products (-10%) as well as in one of the main sectors of national economy in Latvia - food production (-5%). Unfortunately, negative impact of Russian economic crisis and embargo for the time being cannot be fully compensated at the expense of other markets.
Another one of the three pillars of Latvian manufacturing industry - metalworking and machine building – was developing neither good nor bad. The industry is pulled down by unlucky Liepājas Metalurgs. In turn, the manufacture leaders became computers, electrical and optical equipment (growth 39.3%) and furniture (13.9%).
It is only hoped that with restoration of external demand the indicators of Latvian manufacturers and exporters in this year will continue to grow at similar or even slightly higher rates.
However, many problems are expected for exporters. Skyrocketing salaries and wages continue bringing pressure on the competitiveness, demanding for a higher labour productivity.
Demand for building materials also seems to be lower due to dubious prospects of the construction industry associated with slow absorption of EU funds (however, at least partly it can be compensated by exports, for example, into Sweden where the issue of construction has become urgent in connection with recent massive influx of refugees).
Further recession of economy and rapid decline in the purchasing power in Russia will hurt those who failed to cross over to other sales markets. Specific weight of Russia in the export pattern is logically decreasing: from 11.6% in 2013 to 7.9% in the last year. However, until now it remains the third largest market for Latvian exporters. Therefore, the negative trends in Russian economy will still be felt in Latvia.