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With Stabilizing Demand in Foreign Markets and Export Growth, Manufacturing Showed Stable Growth in May
With the stabilization of demand in external markets and an increase in exports, manufacturing showed steady growth in May. It is expected that manufacturing will demonstrate a positive development trend throughout the entire year, mainly driven by the recovery of external demand and the rise in export volumes.
In May 2025, compared to May 2024, the manufacturing output increased by 3% according to unadjusted data, and by 5.6% according to calendar-adjusted data. Overall, in the first five months of 2025, manufacturing output was 1.8% higher than in the corresponding period of the previous year.
At the same time, the positive development of the industry in the coming months will continue to be influenced by geopolitical uncertainty, as well as uncertainty around U.S. import tariff policies, which could negatively impact the competitiveness of Latvian exporting companies. Overall, while growth forecasts for the sector remain favorable, maintaining a high level of flexibility and the ability to quickly adapt to changing global trade conditions will be crucial for continued development. Challenges will also persist for companies that are still closely linked to the Russian and other CIS markets—these companies must continue actively restructuring their cooperation strategies and seek alternative supply and sales markets.
A positive contribution to growth will also continue to come from industries oriented toward the domestic market. Their dynamics are influenced by household purchasing power, including wage growth, tax changes, price stabilization, and other factors.
Development trends remain mixed across manufacturing sub-sectors. In May of this year, compared to the same month last year and based on unadjusted data, the most significant positive impact on manufacturing came from:
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Food industry (+2.7%)
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Manufacture of non-metallic mineral products (+11.9%)
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Computers, electronic and optical equipment (+7.2%)
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Machinery and equipment (+10.5%)
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Printing industry (+9.8%)
On the other hand, declines were observed in:
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Wood processing (-1.9%)
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Chemical industry (-11.3%)
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Apparel manufacturing (-25.8%)
In terms of turnover, in May year-on-year, manufacturing turnover in current prices increased by 0.4%, driven by a 1% increase in export sales. However, sales in the domestic market were 0.5% lower than a year ago. Still, increases were recorded in the sales volumes of food products, machinery and equipment, electrical equipment, and non-metallic mineral products.
Prepared by:
Analytical Service of the Ministry of Economics