Latvian industry in recovery after Covid crisis

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The Latvian production industry has recovered after last year, according to manufacturing companies and economists, Latvian Radio reported August 8.

Statistics show the industry's output in June was 7.6% higher than a year ago. One of the reasons that companies have recovered is the success of the industry, economist Mārtiņš Āboliņš told Latvian Radio. The demand for goods is now significantly above supply. The availability of services was limited at the beginning of the Covid-19 crisis, which has led to a decrease in stock levels. Although this is not good news for consumers, as it means price increases, producers are doing very well.

“In the global industry, we look at new export orders. In world trade, demand is indeed very strong. The good news is that our producers are able to use it successfully. If we look at different manufacturing industries then, compared with last year and compared to the time before Covid-19, all industries are showing positive numbers. Maybe there is a small negative trend in food production,” the economist said.

Āboliņš said that it also contributes to the general public economy because in the long term it means higher budget revenues, which will enable funding to be increased in other areas.

Company EMJ Metāls, which provides metal cutting and bending services, also says recovery has taken place.

“Yes, we've got over it. Of course, in today's situation, we don't really know what will happen after a month, what will happen to prices of materials. Of course, we are also concerned, as a production company, what will happen in the epidemiological situation, because the person cannot stand at the workbenches remotely. But despite that, we are expanding production and are prepared to take on additional employees,” said Agris Punculs, the company's marketing director.

He said that work is currently hampered by problems with accessibility and supplies of materials, which tend to be late. Some customers are also unable to cope with price increases.

Manufacturers of construction materials also lack work, said the construction company Sakret. Demand is stable at the moment, which means construction is underway.

“Construction is ongoing, thank god, and nothing has stopped. But we need to compare ourselves with the union of the countries we have been in since 2004. We are below average. And we need to do everything in public and private orders so that we are where our immediate neighbours are, also Scandinavia, Germany, Poland and so on,” said Andris Vanags, Chairman of the company council.

In the second half of the year, the forecasts for the Latvian industry are also positive. Economist Āboliņš said out that this sector could experience one of the best years in the last decade.

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