Economist: this year for industry commenced on a high note
Compared to January 2016, industrial production output increased by 4.7 % in January 2017.
Increase was recorded in manufacturing and mining and quarrying (7.8 % and 18.8 %, respectively), whereas in electricity and gas supply there was a decline of 0.4 % (following increased production of electricity; gas consumption declined).
In accordance with expectations, the year started out on a high note for industry. Production output has increased by 4.7% over the course of the year. Processing industry output volume has increased 7.8%, mining and quarrying output has increased by 18.8%. Electricity and gas supply have both experienced a drop of 0.4%, explains SEB Bank’s macroeconomic expert Dainis Gaspuitis.
Compared to the corresponding month of the previous year, the industrial production output grew in all proportionally largest sectors – manufacture of fabricated metal products (by 16.9 %), manufacture of wood and of products of wood (by 11.5 %), and manufacture of food products (by 1.1 %). Significant industrial production output rise was observed in manufacture of machinery and equipment (of 35.4 %), manufacture of beverages (of 25.8 %), manufacture of electrical equipment (of 20.3 %), and manufacture of basic pharmaceutical products and pharmaceutical preparations, according to data from the Central Statistical Bureau of Latvia.
Gaspuitis states that industrial growth promises to be very beneficial, which will balance on better export conditions and more active internal demand. «Eurozone’s industrial output volume will continue increasing, which will create a good boost for local producers and ensure consumption changes in external markets. Currently Eurozone’s processing industry output capacity exceeds the average level. In addition, growing demand for loans is currently noted among non-finance companies in Eurozone. Although lending volumes are on a rise, growth remains moderate. Industrial activity indexes around the world also signal about the continuation of expansion.»
Compared to December 2016, industrial production output in January 2017 decreased by 2.8 % (according to seasonally adjusted data at constant prices), of which in manufacturing by 2.8 % and in electricity and gas supply by 3.5%, whereas in mining and quarrying there was a rise of 2.9 %.
Compared to January 2016, in January 2017 manufacturing turnover increased by 6.7 % (according to calendar adjusted data at current prices). The turnover on the domestic market rose by 3.3 % and in exports by 10.1 %.
Compared to December 2016, in January 2017 manufacturing turnover grew by 1.2 % (according to seasonally adjusted data). The turnover on the domestic market rose by 0.5 % and in exports by 2.1 %.
Although it will be hard to maintain January’s growth rate, there are all conditions for growth of 4.5-5% this year. Maintaining this growth rate would help activate the investment matter, which will be a good condition for stable and lively consumption. In the foreseeable future, uncertainty will remain a major obstacle, explains the macroeconomic expert.