BMI View: D eteriorating relations between the EU and Russia, and Russia's subsequent recession, had a sharp knock-on effect in Latvia's construction industry, which had been performing strongly until 2015 . The next decade will be characterised by muted , but steady growth, unlike the previous decade, as slowly improving economic fundamentals drive fuel investment, alongside EU funding for regional energy and transport interconnectivity projects.
Latest Updates And Structural Trends
We see industry growth falling significantly off pace to 5.4% in 2015, before rebounding softly to 6.0% in 2016, then averaging over 4% between 2015-2024, ending with a value of EUR2.4bn.
On November 24 2015, three grant agreements for the Rail Baltica project worth EUR734mn were signed by the EU's Innovation & Networks Executive Agency in Tallinn. The grants were awarded under the CEF and cover planning and construction works to be completed by 2020.
The energy infrastructure sector faces a period of muted growth y-o-y between 2015 and 2024 as pressure on investments remains intense.
|f = BMI forecast. Source: Latvia Statistics, BMI|
|Construction Industry Value, Real Growth, % y-o-y||5.48||6.05||6.08||4.86||4.77||4.70||4.66|
|Construction Industry Value, % of GDP||6.5||6.6||6.7||6.8||6.9||7.0||7.1|
|Construction industry value, EURbn||1.56||1.69||1.84||1.99||2.13||2.29||2.45|
Latvia remains fifth place in our Risk/Reward Index (RRI) for Central and Eastern Europe (CEE). Its overall score of 60.0 points makes it a regional outperformer, with the CEE average only 54.0. However, we believe much of its favourable ranking is indicative of the weaknesses in Europe's construction sector, rather than a reflection of its growth potential.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Latvia Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Latvia Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Latvian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Latvia to test other views - a key input for successful budgetary and planning in the Latvian infrastructure market.
- Target business opportunities and risks in the Latvian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Latvia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.