Lithuanian and Estonian businessmen are ahead of Latvia in terms of investments
In Latvia, 36% of small and medium-sized companies have plans to invest in the development of their business this year. In Estonia and Lithuania, on the other hand, the proportion of businesses with development plans is 42% and 46%, respectively, according to results of a recent study performed by SEB Bank.
22% of respondents in Latvia mentioned having plans to invest up to EUR 30,000 in the development of their business this year. 14% mentioned having investment plans larger than EUR 30,000. 14% of small and medium-sized companies interviewed in Estonia have plans to invest more than EUR 30,000 in the development of their business. In Lithuania, such ambitions were voiced by 20% of interviewed companies.
SEB Bank board member Arnis Škapars: «Economic growth has taken a rapid speed. At the same time, the labour market is becoming narrow, whereas the wage level continues growing. These conditions create pressure for companies to raise their efficiency.
Nevertheless, they require investments. It is clear that Estonian and Lithuanian businesses’ ambitions are higher than their counterparts in Latvia. It should be said that investment efficiency is closely associated with competition. Because of that, we risk falling behind neighbouring countries. In addition – economic growth is the right time for investments, because it is much harder to do during period of economic decline.»
He says that the general mood of small and medium sized companies in Latvia is against the beneficial economic climate. It is possible that the reason for that can be explained with the focus of 83% of those companies on the domestic market, where competition is relatively limited.
«A great deal of focus on the local market improves our businessmen’s lowered look on their growth perspectives – even if purchasing power in Latvia increases, there is no reason for optimism, because population continues to decline. The proportion of small and medium-sized businesses oriented on the local market in neighbouring countries is smaller – 75% in Estonia and 66% in Lithuania. Working with our clients every day, we have observed that exporting companies are more positive and more sensitive towards the need to invest in their development,» Škapars concluded.