Challenges for the mechanical engineering and metalworking industry in Latvia
2018
Licite, L., Latvia Univ. of Life Sciences and Technologies, Jelgava (Latvia). Faculty of Economics and Social Development | Sebins, A., Žogu Fabrika, SIA, Piņķi, Babīte Parish, Babīte Municipality (Latvia)
One of the leading industries in Latvia is the mechanical engineering and metalworking industry; it generates high value added and supplies other industries of the national economy with machinery, technological systems and components. The research aim is to examine challenges for the mechanical engineering and metalworking industry in Latvia. The research found that workforce availability considerably affected mechanical engineering and metalworking enterprises, which was determined by emigration trends and the availability of specialists with adequate education and qualifications, as well as the level of earnings. Average earnings in manufacturing in the country are below the average; besides, they are not competitive with the earnings in the European Union. Nevertheless, the mechanical engineering and metalworking industry is one of the priority export industries to be supported in Latvia, as it contributes most to the GDP. The export volume of mechanical engineering and metalworking products was larger than that of goods of other categories, yet re-exports comprised a considerable proportion in the total exports of Latvia. An examination of the financial attractiveness of the industry revealed that in 2016 the average profit margin among mechanical engineering and metalworking enterprises was 12 %; besides, their net total profit totalled EUR 18 million, which indicated that the industry was economically strong and attractive to potential entrepreneurs.
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