OREANDA-NEWS. September 05, 2008. The July statistics testifies that the processing industry has experienced decline: in comparison with the previous July the amount of the industrial production decreased by 9.1%.

The decline was observed in almost all industrial sectors, but the producers of food products, timber articles and furniture made the biggest “contribution” to those negative indices. We can point out two branches, which showed reasonable growth – metal manufacturing and manufacturing of non-metallic mineral articles.

For the time being the situation in the industry remains tense, because the manufacturers are influenced not only by the inner factors (for instance, rising inflation and increase of energy resources), but also by unfavourable situation in European economy and activity decline in CIS. According to the latest data, the economic development of the main Latvian trade partners shows slowing features, which also has negative influence on Latvian manufacturers and exported goods. 

This situation once again indicates the unbalance of Latvian economy. Firstly, during the years of boom the processing industry developed more temperate than those sectors oriented on consumption. So, there is no surprise that now, when economical situation in domestic and outward markets is tense, the statistics in industry shows rapid decline. Secondly, we cannot rely on the export of two or three branches like it was up to now. The offer of exported goods should be diversified emphasizing the good with the biggest added value. 

It is doubtless that this year decline in the processing industry is quite sore process, which, unfortunately, is accompanied with the reduction of companies’ activity. Nevertheless, without this year’s economical activity decrease it would be hard to promote essential changes in the economic structure. Today’s situation creates good preconditions for effective economical development in a long-term. Restructuring of the economy and processing industry could solve the problems of low productivity and efficiency. There is no doubt that now the position and action of the government is very important.