Latvia's calendar-adjusted industrial production fell 0.6% y/y in August, after expanding 2.7% the previous month, the Central Statistical Bureau (CSB) reported on October 4.

The drop in output extends the erratic performance of the Latvian industrial sector over the past 18 months or so. That poses questions about whether industry is capable of achieving sustained recovery from the depths into which it fell during the crisis in the near term.
 
A sharp fall of 15.7% y/y in utilities drove the decline in the headline figure in August, the CSB data show. Output also fell - by 6.1% - in mining and quarrying. The manufacturing segment, meanwhile, saw production increase 2.8%.

Within the manufacturing sector, production of computer, electronic and optical products boomed for a second month in a row, pushing to growth of over 37%. The the electrical equipment segment followed with a 20% gain. Manufacture of wearing apparel declined nearly 15%.

In seasonally adjusted monthly terms, industrial production fell 2%, with mining and quarrying advancing 4.5%, while manufacturing fell 1.7%. The electricity and gas supply segment also dwindled, by 7.8%.  

Latvian industry continues to struggle to build momentum. Output slowed its growth between November 2015 and March before contracting in April. May-July saw something of a rebound.

The contraction of industrial output in August will increase worries over the wider Latvian economy, which has recently been projected to expand just 1.9% in 2016, down from 2.7% in 2015. In the second quarter, the Latvian economy grew a seasonally adjusted 0.8% y/y.