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Saturday 24.02.2018 | Name days: Diāna, Dina, Dins

Optimism of Latvia’s large businesses – 2018 will be a successful year

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s large companies are looking towards the future with greater optimism that their Baltic neighbours. 61% of Latvian CEOs are confident that 2018 will turn out successful, whereas the proportion of CEOs who agree with that is 54% in Lithuania and 43% in Estonia, according to results of SEB Bank’s survey.

67% of large companies in Latvia predict that their turnover will increase next year. Every tenth respondent expects turnover growth rate to exceed 10%. This prediction is a bit behind Estonia, where increase is expected by 70% of large companies. In Lithuania, 58% of interviewed finance directors said their expert turnover to increase. Compared with previous year, all three countries have experienced an increase of the number of companies that expect turnover growth.

SEB Bank board member Ints Krasts: «75% of large companies in Latvia say they feel financially secure. Even in everyday work with Latvia’s large companies we feel that they have saved up considerable finances over the years. This allows them to fee stable and secure. GDP growth rate, which is currently at its highest point in the past six years, also provides reason for optimism.»

The biggest challenge – matters associated with labour force

Compared with last year, the number of companies who name labour costs as one of the biggest challenge has doubled in Latvia. This year, 50% of CEOs interviewed in Latvia admit labour cost increase causes some concern for them. This is also challenge number one for Lithuania and Estonia: 56% of Lithuanian and 51% of Estonian large companies mentioned it.

Another 45% of CEOs of large companies in Latvia, 41% of their colleagues in Lithuania and 38% in Estonia are concerned about availability of qualified workers. Among other challenges, Baltic CEOs mentioned demand and prices of raw materials. Factors like funding availability, interest rates and fluctuations of currency prices are not all that important to businesses.

«More rapid economic growth comes along with rise of labour costs. What is particularly interesting is although economic growth has been noticed, ambitions of companies to increase the number of employees has remained unchanged. Instead, major companies are busy searching for ways to increase productivity – by searching for opportunities to improve employees’ efficiency and automating production processes. This is the right direction, because productivity-wise Baltic companies remain behind their western competitors,» says Krasts.

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