Econ­o­mist: this year for in­dus­try com­menced on a high note

Baltic News Network - - Front Page - Edijs Pālens/LETA

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.

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