Industry needs to “climb value-added ladder”

Latvia's manufacturing base is “back on its feet” after a tough period at the beginning of 2014 crisis but producers still need to look towards producing higher-yielding value-added goods, a report from Latvia's largest retail bank, Swedbank, said Monday in a report.

“Manufacturing output in January-April overall was 1.8% larger than a year ago. Most of the manufacturing industries are experiencing growth; the notable exception is base metals,” Swedbank said, adding that the fallout from the closure of Liepajas Metallurgs, the country's largest steelmaker and a major employer, was starting to fade away.

While foreign demand is expected to pick up in 2014, the situation with regard to Ukraine and Russia has potential to cause problems, Swedbank warned, forecasting manufacturing output growth of 3 to 4 percent in 2014 as a whole.

But the bank's clearest call was for manufacturers to climb the value-added chain, producing more top-end, finished goods rather than raw materials and components.

“It is crucial to 'produce smarter' to sustain growth in manufacturing. A shift towards more technologically advanced industries and sophisticated products is needed.

"There are signs that this is slowly happening, but more progress is needed. Policy support can accelerate this process, and, although there have been some positive changes, much remains to be done, especially in reforming the education system to improve the quality of vocational and tertiary education, strengthening cooperation amongst academic, business, and government counterparts, and supporting innovations,” Swedbank said.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles
Economy
Economy