The Bank of Latvia economist Agnese Rutkovska said that although the situation is different in certain areas of industry and businesses, the first half-year industry data in Latvia is better than expected and above average in the European Union.
"Still, we can't talk about renewed capacity for the manufacturing industry – there has been a drop in March and April. But against the background of other countries, Latvia has done relatively well. We have a well-developed food production that will be up to date in any crisis. It was harder for high-tech industries, for example. In this crisis, both the circle of our export countries and diversification have provided such good support for us to remain in a better position," Rutkovska said.
Economist at Citadele, Mārtiņš Āboliņš, estimated that the encouraging latest six-year industry statistics showed that the sector had managed to recover quickly.
"A pronounced drop in the industry during this crisis was only two months – in April and May. Compared with last year, production volumes fell 10%, but we see a pretty significant improvement in June. (..) Our producers have performed better than the producers in Germany, while production in southern Europe fell by 20% and more in the spring months. For us, many producers are foreign investors, and if production costs need to be reduced, it is cheaper to transfer jobs to Latvia. The clothing and textile products sector suffered more heavily as world sales of clothing declined significantly. Metalworking and mechanical engineering also suffered," said the economist.
According to the Luminor economist Pēris Strautiņš, the success of the Latvian industry is currently impacted by the extensive product range and the various sales markets. In Latvia, for example, there is no production of cars that stopped trading during the pandemic, while construction materials are still very demanded throughout Europe.
“Fortunately, it was in our main target markets in Europe that construction was quite stable. It wasn't so everywhere. In countries like Italy or France, the drop was two-thirds, while in Germany, the drop was just under 1% in one month,” Strautins said.
Economic experts say the biggest risks to the industry remain the COVID-19 spread – whether there will be a second wave of disease.