Latvian industrial production returns to robust growth in June

Latvian industrial production returns to robust growth in June
By bne IntelliNews August 3, 2016

Latvia's calendar-adjusted industrial production expanded 7.9% y/y in June, after contracting just two months earlier, the Central Statistical Bureau (CSB) reported on August 3.

The growth follows an expansion of over 5% in May, which came after output growth had slowed between January and March, and finally fallen into contraction in April. The June reading is the strongest since April 2015, with industrial output growth barely exceeding 4% since. Still, questions remain on how sustained the expansion could prove.
Output in the manufacturing sector drove the growth, expanding 8.2% on the year. Within the sector, production of computer, electronic and optical products grew nearly 17%, followed by a 15.5% growth in the fabricated metal products segment. On the other hand, manufacture of motor vehicles, trailers and semi-trailers dropped over 22%.

Output in electricity and gas supply also contributed to the headline result by growing 9.6%. Only production in the mining and quarrying sector declined, by 3.2%.

In seasonally adjusted monthly terms, industrial production grew 0.7%, with mining and quarrying expanding 0.4%, while manufacturing grew 0.3%. The electricity and gas supply segment expanded 3.8% on the month.  

Still, it will take a more sustained growth in industry to relieve worries over the wider Latvian economy, which has recently been projected to expand only 1.9% in 2016, down from 2.7% in 2015. In the second quarter, the Latvian economy only grew a seasonally adjusted 0.7% y/y, a flash reading from the CSB showed on July 29.