Latviski English По-русски
Monday 23.07.2018 | Name days: Magda, Magone, Mērija

Experts: manufacturing can give one of the largest contributions to GDP

(No Ratings Yet)

The output of manufacturing industry in 2012, compared with 2011, has grown by 10.0%. With that, it is expected that this index will not be any smaller by the end of the year. As a result, manufacturing industry could give one of the largest contributions to the increase of GDP, bank economists comment the latest manufacturing industry data.

Bank of Latvia Economist Igor Kasyanov:

Manufacturing industry data with retail trade indexes, good agricultural harvest and stable transport data allows us to hope for a swift GDP assessment at the end of the week.

It is good that every other month brings new comings to the structure of manufacturing industry’s production. Recently though, investment activity grew more quiet. While there was word about a number of serious investment projects in the end of 2011 and beginning of 2012, this information appears to be less abundant in the end of 2012 – seems like manufacturers are taking a wait-and-see position, assessing events on both the global and local markets.

European Commission’s data regarding the mood in manufacturing became accessible in the end of October. According to the information, the mood index reduced by 0.2 points – this shows stability. The quarter’s assessment data shows concerns – the assessment of new orders for next months has significantly worsened. The projected production output for Q4 of 2012 also reduced slightly – 71.6% (Q3 – 72.0%). The most significant production output reduction is noted in beverage production, textile goods production, printing, construction material production, pharmacy, chemical production, metallurgy and manufacturing of cars and other vehicles.

DNB Bank Economics Expert Peteris Strautins:

The September reduction in the output of manufacturing industry in comparison with August is the least helpful event to happen in the last several months. The previous so called “rushed” data did not show anything of the sort to happen in the near future. There is hope that September’s events will become an exception. It should be added that the proportion of orders, especially in export, reached its all-time highest index in August.

I expect economic increase to be based on manufacturing a lot more than it is now. This marks this decade, and it will contribute to a more equal income division. Manufacturing offers wider opportunities for people to build their careers, especially ones that do not kick off with documents of higher education in their pockets, offering wider opportunities to show their abilities.

In addition, manufacturing is mostly located on the country’s territory. The most recent available data regards the year 2009, at the time Riga’s income from manufacturing was 37%, as opposed to 53% proportion of GDP. Therefore, economic growth that is more based on manufacturing will also prove to be reducing in terms of regional differences.

It is unlikely that it is a coincidence that new EU member states with a large manufacturing proportion like the Czech Republic, Slovakia, Hungary, Slovenia are part of EU equal countries, while Latvia with its small manufacturing proportion (which is only now reaching the average among EU states) – is one of the least equal. Tax policy is important, but it does not decide everything.

Chief Swedbank Economist Martins Kazaks:

Even though a detailed look at sub-sectors does not show any signs of slowdown of the general growth rates, economic slowdown will do its part in the world. Manufacturing industry’s output’s growth rates will continue to drop in the remaining months of 2012, and the current two digit growth will only return along with economic recovery and the end of recession in the Eurozone.

There is no reason for pessimism. Attitude is generally cautious though – competition will grow, which means slower growth rates.

SEB Banka Economist Dainis Gaspuitis:

The overall unimpressive September progress was set by a number of factors. For example, the rich August and last year’s September, as well as the partial reflection of the influence of global tendencies. Attention is mainly versed towards the ability of the manufacturing industry to develop, on which general tendencies in the economy are largely dependent. Growth is increasing in separate sectors, which is largely set by the previous rapid growth level. This makes it difficult for many manufacturing sub-sectors to increase output volume at current rates.

Despite complicated events on the global markets and the notable growth rate increase, manufacturing industry has exhibited the ability to develop in this kind of environment. It is very important to continue investing in development, including power output increase. It is expected that manufacturing industry’s moderate growth rates will remain in the coming months as well.


Leave a reply

Ryanair earns 20% less in April-June and readies for strikes

The Irish airline Ryanair has registered a 20% fall in profits as it has had higher wage costs as the airline as a result of continuing industrial action by staff over remuneration and conditions.

Swedbank: Riga is behind neighbouring capital cities with real estate deals

With residents’ purchasing power and savings on a rise, more and more residents consider housing acquisition options, according to Swedbank data.

Lithuania's Šiauliai has plans for a joint discount and service system with Latvia's Jelgava

Šiauliai municipality plans to adopt a joint discount and service system with Jelgava.

Criminal prosecution requested for two police officers for cheating at gambling

Internal Security Bureau has requested the prosecutor’s office to commence criminal prosecution of several people, including two police officers, for using illegal computer software to cheat at slot machines.

Fire in Valdgale held at bay within perimeter; Crisis Management Council calls emergency meeting

Last night, firefighters in Latvia managed to hold at bay the fire that had run through Valdgale County last week within the safety perimeter, says State Fire and Rescue Service press-representative Inta Palkavniece.

Nearly 10% of HIV infected in Latvia are youngsters

Latvia is currently the leader among newly uncovered HIV cases in Europe. On top of that, nearly 10% of all HIV infected are youngsters, says public health specialist Baltic HIV Association member Anda Ķīvīte.

In pictures: Large wildfires in Sweden continue

In Sweden, record summer temperatures and weeks without rain have caused series of wildfires across the vast country.

Lursoft: catering sector in Latvia – how much industry leaders earn and pay in taxes

Using a study and compiling data on companies’ business activities for the past three years, Lursoft wanted to find out if it is true catering companies in Latvia work with losses, and what their tax contribution is.

Shooting attack in Canada claims lives

A shooting attack has taken place in Toronto, Canada, with two people having been killed died and 13 others injured.

Farmers in Estonia active in Open Farm Day

Estonian farmers have held their fourth Open Farm Day as over 250 farms in the Baltic country invited everyone interested to experience growing and making of domestic food and agricultural products.

Police commence investigation of an offshore network owned by Lembergs’ daughter

Latvian State Police has commenced an investigation following journalists’ publication of materials about an offshore network owned by suspended Ventspils Mayor Aivars Lembergs’ daughter.

Polish Sejm rushes to change defiant chief Judge of Supreme Court

Poland's legislators have passed rules to hasten the changing of a new Supreme Court chief as part of far-reaching judicial reform that has been criticised by the European Commission among others.

Heat wave to continue in Latvia along with thunderstorms and heavy rain at times

The heat wave active in Latvia will not back off this week – days will remain hot and night-time air temperature will not drop below +20° C. Heavy rain and thunder will be observed nearly every day this week, according to Environment, Geology and Meteorology Centre.

Bulgarian parliament opposes readmission of migrants from EU countries

Bulgarian parliament prohibited the its government from signing bilateral agreements with other European Union member states on readmitting migrants first entered the bloc in Bulgaria.

Week in Lithuania. Liberals ex-leader fails to recover confiscated cash

Eligijus Masiulis, a former Liberal Movement leader on trial in a major political corruption case, has failed to recover cash that was found and seized during searches of his home.

BNN summary of the week: open presidential election in Latvia and no more plastic bags for shoppers

BNN offers a summary of this week’s topical news in a variety of categories: Future; Change; Fight; Decline; Business; Progress.

SRS: cash register reform still stagnates, but has become much faster than it was last year

The cash registers reform continues stagnating. However, it has become much faster than it was a year ago, as reported by State Revenue Service.

Specialists to search for solutions to topical environmental problems in Ventspils

On Friday, 20 July, a meeting was held between Ventspils Commercial Port representatives and specialists from State Environment Service.

Children with functional disorders to receive services financed by EU funds

Child invalids will have access to social services intended to improve their social skills and mobility. More than EUR 4.2 million has been allocated for this goal from the European Social Fund, as confirmed by Latvia’s Central Financing and Contracting Agency.

Producer price level in industry up 4.3% in Latvia

Compared to June 2017, the average level of producer prices in Latvian industry increased by 4.3 % in June 2018. Prices of products sold on the domestic market rose by 4.8 % and those of exported products by 3.7 %.

Total tax debts in Latvia in July – 1.212 billion euros

At the beginning of July total tax debts in Latvia, including outstanding debts, halted debts and debts applied with repayment term extensions, accounted for EUR 1.212 billion, which is 0.8% less than a month prior, according to data from the State Revenue Service.

Survey: every third Latvian resident has received illegal loan offers

Nearly every third resident in Latvia or 31% of respondents admit having received offers to use illegal loan services, as concluded in a survey performed by Latvian Alternative Financial Services Association and SKDS.

Libya opposed to EU's idea to establish migrant centres in North Africa

Libya is against the solution of the European Union to set up migrant centres in the North African country as a means to keep migrants from arriving in the bloc and Libya would not be convinced with financial support, its Prime Minister Fayez al-Sarraj has noted.

Arrest warrant on Catalan ex-President cancelled by Spain

The Supreme Court of Spain cancelled a European arrest warrant for former Catalan regional leader Carles Puigdemont, as Germany refused to extradite him to face accusations of rebellion for declaring the independence of Spain's region, Catalonia in 2017.

Latvian government plans to allow handing expired food to charity

Latvia’s Agriculture Ministry has prepared amendments to the Law on the Supervision of the Handling of Food that provide permission to hand over certain types of food products to charity after the end of their expiry date.