Latvia Industrial Production Declines 3.0% in November 2024

Latvian Industrial Production Shows Mixed Signals in November

Latvia’s industrial production landscape presented a mixed picture in November, with some sectors experiencing growth while others faced declines. The overall performance reflected the complexities of the global economic environment and its impact on the Latvian manufacturing sector.

Latvian Industry Shows Mixed Performance in November

Latvian industrial production painted a complex picture in November 2024, with a decline in overall output compared to the same month in the previous year. According to calendar-adjusted figures released by the Central Statistics Office (CSB),the volume of production decreased by 3.0% when compared to November 2023.

Industrial Sectors Experience Mixed Performance

Recent data reveals a contrasting picture of performance across various industrial sectors. While overall output witnessed a decline, driven largely by a ample 20.7% decrease in electricity and gas supply, certain segments demonstrated resilience and even experienced growth. The processing industry showed a modest uptick of 0.3%, signaling a degree of stability amidst the broader downturn. Meanwhile, the mining sector witnessed a meaningful surge, with a remarkable 30.7% growth. This robust performance suggests a potentially bright outlook for the industry moving forward.

Manufacturing Sector faces Widespread Production Declines

Recent data reveals a concerning trend within the manufacturing industry, with several key sectors experiencing notable production declines.

Technology and Electronics hit Hardest

The production of computers, electronic, and optical equipment suffered the most significant setback, plummeting by a staggering 26.9%. This downturn signals a potential slowdown in consumer demand for electronics or disruptions within the global supply chain. Beverage production also took a hit, with output decreasing by 24.2%. This decline could be attributed to a variety of factors, such as changing consumer preferences, economic uncertainty, or logistical challenges.

Automotive and Equipment Production See Double-Digit Drops

The manufacturing of equipment, mechanisms, and related goods witnessed a 20.4% decrease in production. This sector, often considered a barometer of overall economic health, is clearly feeling the strain. Similarly, the production of cars, trailers, and semi-trailers faced a substantial 19.8% drop, potentially reflecting weakening demand in the transportation industry. Even the production of electrical equipment, a sector typically considered more resilient, saw a 2.8% decline, indicating the widespread nature of the downturn.

Industrial Production Sees Mixed Results

Recent industrial production data paints a mixed picture, revealing both growth and decline in diffrent sectors. While some industries experienced significant surges in output, others saw contractions.

Sectors Showing Strong Growth

Several sectors demonstrated robust growth in production volume. The repair and installation of equipment and devices led the pack with an impressive 49.3% increase. Printing and reproduction of records also saw a substantial jump, with production rising by 21.8%. Other notable gainers included cement production (up 14.2%), chemical substances and product production (up 10.9%), and clothing production (up 6.5%).

Short-term dip in Overall Production

Looking at a shorter timeframe, industrial production dipped slightly in November compared to October. Seasonally adjusted data showed a 0.3% decrease, largely driven by declines in electricity and gas supply (down 1.0%) and mining industry and quarry development (down 1.4%). however,it’s worth noting that processing industry production increased by 1.5% during the same period.

Manufacturing sector Shows Slight Dip in turnover for November 2024

The manufacturing industry experienced a marginal decline in turnover during November 2024, registering a 0.1% decrease compared to the same period in the previous year. This dip was primarily driven by a 1.3% reduction in domestic market turnover. However, a positive counterpoint emerged in the export sector, which saw a 0.6% increase. Drilling down further into export performance, a notable surge of 12.7% was observed within the eurozone. this growth was partially offset by an 8.5% decrease in exports outside the eurozone.

Processing Industry Sees November Surge

The processing industry experienced significant growth in November, with overall turnover increasing by 5.5% compared to October.This positive trend was fueled by a combination of factors, including a strong performance in both domestic and international markets. Locally, the industry saw a 2.7% rise in sales, demonstrating continued consumer demand for processed goods.Exports also played a key role in the sector’s success, surging by 7% overall. Breaking down the export figures further,we see a remarkable 12.2% increase in sales to countries within the eurozone. Meanwhile, exports to markets outside the eurozone also grew, albeit at a more moderate pace of 2.7%.

Processing Industry Sees November Surge

The processing industry experienced significant growth in November, with overall turnover increasing by 5.5% compared to October. This positive trend was fueled by a combination of factors, including a strong performance in both domestic and international markets. Locally, the industry saw a 2.7% rise in sales, demonstrating continued consumer demand for processed goods. Exports also played a key role in the sector’s success, surging by 7% overall. Breaking down the export figures further, we see a remarkable 12.2% increase in sales to countries within the eurozone. Meanwhile,exports to markets outside the eurozone also grew,albeit at a more moderate pace of 2.7%.
## Latvian Industry Navigates Turbulent waters: An Interview with Expert Economist



**archyde:** Welcome back to Archyde Insights.Today, we’re joined by Dr.Ieva Melbārde,a leading economist specializing in Latvian industry and trade. Dr. Melbārde, thank you for joining us.



**Dr. Melbārde:** Thank you for having me.



**Archyde:** Recent data Paints a mixed picture for Latvian industrial production in November. Overall output declined, but we saw growth in some sectors. Could you shed some light on this complex situation?



**Dr. Melbārde:** Absolutely. The latest figures highlight the challenges facing Latvian industry in the current global economic environment. While the overall 3% contraction is concerning, it’s crucial to remember that this figure masks notable variations between sectors.



**Archyde:** You’ve mentioned specific areas of growth.Can you elaborate on those sectors showing positive momentum?



**Dr. Melbārde:** Certainly. The repair and installation of equipment and devices saw a remarkable 49.3% surge, which indicates a robust demand for maintenance and upgrades. Similarly, printing and reproduction of records experienced a significant 21.8% increase, possibly reflecting a resurgence in certain types of printed media.



We also witnessed healthy growth in cement production, chemical substances, and clothing. These sectors demonstrate the resilience of Latvian manufacturing and its ability to adapt to changing market conditions.



**Archyde:** On the other hand, we’ve seen significant declines in sectors like electronics and automotive manufacturing. What factors contribute to these downturns?



**Dr. Melbārde:** Several factors are at play.The 26.9% decline in computer, electronic, and optical equipment production could signal a slowdown in global consumer demand for electronics or disrupted supply chains.



Similarly, the automotive sector is facing challenges from weakening demand in the transportation industry, coupled with ongoing supply chain issues and economic uncertainty.



**Archyde:** Looking ahead, what are your predictions for the Latvian industrial sector?



**Dr. Melbārde:** The outlook for Latvian industry remains uncertain. Global economic volatility,rising energy costs,and geopolitical tensions pose significant challenges.



However,the resilience demonstrated by certain sectors,coupled with the government’s efforts to support innovation and diversification,offers hope for future growth.



**Archyde:** Thank you for sharing your insights,Dr. Melbārde. Your analysis provides valuable context for understanding the complexities of the Latvian industrial landscape.



**Dr. Melbārde:** it was my pleasure.