Manufacturing growth resumed in June
August 3, 2020
The information was prepared by Edmunds Gergelevičs, Analyst of the MoE Analytics Service.
According to the Central Statistical Bureau, manufacturing output in June 2020, according to unadjusted data, was 0.3% higher than a year ago. In the first half of the year, manufacturing output was 4.3% lower than a year ago (according to unadjusted data).
Unlike in May, when the only sector that made a significant positive contribution to manufacturing was the chemical industry, several sectors already showed positive trends in June. The chemical industry continued to make the largest positive contribution to growth (up 25%), largely driven by growing demand for disinfectants. The production volumes of the food industry (+ 1.9%), wood processing (+ 0.7%), electrical equipment (+ 4.5%) and printing (+ 6.9%) also increased.
On the other hand, the annual development of the manufacturing industry in June continued to be negatively affected by the decline in car and trailer production (-19.5%), which was affected by the overall situation in the European automotive industry. The decline in output was also observed in the manufacture of fabricated metal products (-6.4%) and machinery and equipment (-12.6%). It should be noted that all these annual reductions were significantly lower than a month ago.
In June, the turnover of manufacturing at current prices also increased by 2.7%. There was a slight decrease in the volumes of products sold on the domestic market, while the volumes of products sold in exports increased, by -0.9% and + 4.8%, respectively.
The negative economic impact of the coronavirus is still being felt in the development of the manufacturing industry. As in the overall economy, the outlook for manufacturing is uncertain. The epidemic has a significant impact on the global and Latvian economies, but the magnitude of its impact is still difficult to determine. Although more and more sectors will return to growth in the coming months, growth in manufacturing will continue to be constrained by external demand.