Latvia Industrial Output January 2008

According to the latest data from Latvijas Statistika, when compared to December 2007 industrial production in January was up slightly. On a constant prices (considering the influence of the price changes in the reference period) and seasonally adjusted basis (considering the influence of the season and number of working days) it increased by 2%. Of this the increase in mining and quarrying activity was 8.3% (4.2% according to seasonally adjusted data), electricity, gas and water supply 7.8% (3.4% according to seasonally adjusted data), while manufacturing decreased of 8.8% (increasing 1.5% month on month according to seasonally adjusted data).

OK, so much for the rigmorole, now what does all this mean? Well it means that in January and over the longer haul things were still getting worse, but that they were getting worse at a slighly slower rate than in December. If we look at the all-industry chart, we will see that the annual rate of decline was not only reduced in January, but annual break even point was almost reached with only a very slight reduction in output (-0.1%) taking place. But since the volatility (the ups and downs) in the data is so pronounced I think it would be foolhardy to try and read anything very much into any of this at this point.



If we look at the year on year chart for manufacturing only, then again the annual rate of deceleration in manufacturing decreased. Of course this is basically good news, but we need to see first whether this is sustained or just a blip.



Perhaps the most revealing chart if the one for the all industry index itself. What we can see here is that December 2007 was a very bad month, while December 2006 was a very good one. So last months year on year number was unflatteringly low, and some bounce back was to be expected. Bottom line: we are still effectively contracting.