Although March was the first full month spent by Latvian processors under limited market conditions in Russia, Belarus and Ukraine, the Finance Ministry said raw material stocks were not depleted and demand remained high, helping the industry maintain high growth.
According to the Central Bureau of Statistics, in March of this year compared to March 2021, production volumes in Latvia’s manufacturing industry increased by 10%, but in the industry as a whole at constant prices by 6.3%. In the first quarter of the year, growth was 7.4% in manufacturing and 4% in industry.
In the first quarter, the manufacturing industry continued to grow rapidly, supported by production increases in wood (6.6%), construction materials (18.5%), metals (120.5%) and fabricated metal products (12%). , also in the manufacture of beverages (29.3%). On the other hand, production volumes of food (2.9%) and paper and paper products (7.7%) contracted.
Wood sector, one of the manufacturing sub-sectors, showed a strong growth of 16.7% in March this year, the highest growth since June last year. Representatives of the Ministry of Finance explain that the growth was supported by both dry weather conditions in March that encouraged afforestation and increased demand in the domestic market due to reduced timber imports from war-torn countries. .
Significant growth in production volumes in March is also seen in key sectors such as construction materials manufacturing (12.9%) and fabricated metal products (5.9%). Growth was also recorded in smaller sectors such as textile manufacturing (20.1%), printing and reproduction of recorded media (29.8%), automotive (17.3%) and the manufacture of chemical and chemical products (20.3%). , showing the fastest growth since March last year. The relatively small metals industry is also showing a rapid growth of 124.1% and is expected to develop further rapidly with the sharp increase in domestic demand, according to representatives of the Ministry of Finance.
In March this year, decreases were recorded in the manufacture of paper and paper products (13.7%), the manufacture of computers, electronics and optical equipment (13.8%), and the manufacture of electrical equipment (5.1%).
In March this year, food products production decreased by 0.2% to the same level as last year, while beverage production increased by 28.2% in the 12th month.
The mining sector also grew by 9.2%, despite the high base in March last year.
Electricity production and gas supply decreased in March this year due to dry weather conditions. Compared to March 2021, the sector shrank by 18.6% and a total of 16.5% in the first quarter, driven by the decline in electricity generation from cogeneration plants in both March and the quarter, while hydroelectric generation exceeded the previous year’s level. In March this year, electricity was imported one and a half times more, but twice as much as exported in the first quarter, representatives of the Ministry of Finance reported.
The increase in producer prices in the manufacturing industry has been fluctuating between 18-20% for the eighth month and reached an increase of 19.7% in March this year compared to March of the previous year. The largest increases were observed in the wood industry (31%), rubber and plastic products (26.4%), chemical and chemical products (23.9%) and food products (17.1%).
According to the representatives of the Ministry of Finance, the results of the surveys compiled by the European Commission show that the confidence of the Latvian industrialists or the situation assessment and expectations in the sector continued to deteriorate in April. Producers pointed to a decrease in the number of orders and expect a decrease in production quantities, while inventories of finished goods remained at normal levels. While sentiment in the industry has deteriorated, it is still around the long-term average in April and well above the declines caused by the pandemic in 2020.
In March and April this year, the European Union’s overall economic sentiment index fell faster than the Latvian economic index after its growth in the second half of last year, but remains the long-term average. On the other hand, Latvia’s economic confidence index reached its long-term average last year and fell below it in March and April this year.
Source: Tv Net