Forestry and woodworking industry is the most important export industry in Latvia, amounting up to one third of total exports. One of the success factors of the industry are the richest forest resources in Europe (Baltic pine, birch, spruce and aspen) that is strongly supported with easy access to raw materials from Russian forests, cost effective local labour and proven R&D capability.
The leading sub-sector of the industry is timber sawing (42.2 %), plywood and boards & panels (13.5 %), round wood (10.6 %) and furniture (10.6 %), most of which is exported to UK, Germany and Scandinavia, following by Japan and US.
Engineering and metalworking in Latvia, has a long history of a leading industrial sector. Latvia has been previously utilised as one of the high-tech manufacturing centres for the Soviet military and aerospace industries. Currently, it is based on contract manufacturing for foreign customers and further development of domestic construction market. The evolving trends in the metal manufacturing lean towards electronics contract manufacturing, tool production, automotive contract manufacturing and shipbuilding.
Products typically include intermediate goods, semi finished products, construction components and finished merchandise such as transport vehicles, machines and machine tools, and electrical/electromechanical apparatus and equipment. Among the biggest outsourcing orders in the industry come from engineering multinationals such as ABB, Ford, GM, Audi, Volvo and Philips.
Construction and real estate industry is one of the most dynamic sectors in Latvian national economy. The rapid growth of 12.5 % within the last three years is generated by local construction for public use along with export of construction services. The escalation of amount of shopping centres, government buildings and private housing is expected to raise the purchasing power, as consumers will wish to increase their living space in the near future.
Primary export directions for price-sensitive construction services are Sweden and Norway, and advanced civil engineering projects are executed on behalf of multinational corporations world wide.
Chemicals and pharmaceuticals are covering production of pharmaceuticals, raw materials and semi processed products, as well as manufacturing of paints, industrial and household chemicals. The industry growth is strongly supported by the rapid expansion of local construction works and metalworking, resulting in increasing R&D activities within life sciences, wood chemistry and the development of new materials for aerospace and automotive sector.
So far, the main export directions for pharmaceuticals are Russia and CIS (Commonwealth Independent States) markets (54.3 %). However, the industry expects to attract more foreign contractors for e.g. casein, glass fibre and its products as well as generic drugs.
