Latvian industrial production returns to feeble growth in June

Latvian industrial production returns to feeble growth in June
By bne IntelliNews August 5, 2018

Latvia's calendar-adjusted industrial production growth inched up 0.4% y/y in June, the Central Statistical Bureau (CSB) reported on August 3.

Output registered growth after falling 1.1% y/y in May, the first contraction in industrial production since August 2016. The annual growth in June is however even feebler than in March and April, when industrial production expanded only 1% y/y. The current streak of minimal, or lack of, growth points to a possible slowdown in the rate of economic expansion in the third quarter.

The Latvian economy grew a seasonally adjusted 4.2% y/y in the second quarter, a flash reading from the Central Statistical Bureau (CSB) showed on July 30.

That was a slowdown in economic expansion in comparison to the seasonally adjusted expansion in January-March of 4.8% y/y. April-June was also a third consecutive quarter in which the economy failed to accelerate growth in adjusted terms.

Unadjusted growth came in at 5.1% y/y, adding 1.1pp to the unadjusted y/y expansion recorded in the preceding quarter. 

The weak annual growth of annual industrial production in June was an effect of output in the energy and gas supply segment retreating 8.9% y/y, although that was still an improvement over a decline of 16.4% y/y the preceding month.

Production grew 2.1% y/y in the manufacturing segment, returning to growth after falling 2.9% y/y in May. Output growth accelerated to 16.1% y/y in mining and quarrying, after growing 7.1% y/y in May.

Within the manufacturing sector, eight out of 16 segments recorded falls in annual production growth in June, compared to six in May. Slowdown befell manufacture of food products, beverages, textiles, paper and paper products, printing, fabricated metal products, furniture, as well as repair and installation of machinery and equipment.

Production grew the fastest in the manufacture of motor vehicles, trailers and semi-trailers, at 35.4% y/y. Output also expanded 28% y/y in the manufacture of electrical equipment. Manufacture of computer, electronic and optical products furniture also grew fast, at 13.8% y/y.

In seasonally adjusted monthly terms, industrial production increased 0.6% in June after falling 0.2% m/m in May. Output in the manufacturing segment did not change m/m after growing 1.9% m/m in May.

Output in mining and quarrying increased 2.7% m/m in June after growing 9.4% m/m the preceding month. In the utility segment, production grew 3.2% on the month, versus a fall of 1.1% m/m in May.