Prospects for the processing industry development: businessmen's outlook improves
In several European countries recovery of the economy is beginning to be observed, as the real GDP, after dropping for several quarters is showing growth in the third quarter over the previous one. International institutions are predicting economic growth for the next year both in the world at large and in the euro zone. Along with the improvement in the Latvian price and cost indicators, it allows us to predict a gradual settling of Latvian exports and thus also processing industry on the road to stable increases.
As yet, however, the month-to-month changes in the processing industry continue to fluctuate, the October data on the volume of the processing industry in comparative prices according to seasonally adjusted data indicate a decrease of 1.9% over September. The continuing weak domestic demand is reflected in the drop in the production of construction materials and foodstuffs.
In the processing industry overall the production volumes have failed to reach the levels observed in October of previous year, however, the annual decreases have substantially diminished compared to the beginning of the year. On a positive note, in several branches - e.g., in the production of wood pulp and chemical products, where an annual increase was observed for several consecutive months, - the trend has persisted. In metal production, increasing for three months in a row, production volumes in October exceeded those of the previous October.
The domestic demand remains weak, yet the recovery of foreign demand allows the entrepreneurs to have an increasingly hopeful assessment of the situation in industry, which has been steadily improving for the past few months. According to the entrepreneur survey data published by the European Commission, in November just like in October, entrepreneurs in the European Union and euro zone as well as in Latvia are having an increasingly positive assessment of the current developments in production and in export orders and see positive trends in future production development.