Latvia Construction Market Size, Trends and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2022-2026

Latvia Construction Market Size, Trends and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2022-2026

Summary

The Latvian construction industry remained weak in 2021 as it struggled to recover from the economic shock of the coronavirus (COVID-19) pandemic. The industry registered a contraction of 7% in 2021, owing to a fall in its subsectors of construction, such as building construction (-2.9%). GlobalData revised down its growth projection for the Latvian construction industry, with the industry now forecast to record real output growth of 4.7% in 2022-down from an earlier forecast of 6.6%. This downward revision is attributed to the continued weakness in the industry in Q1 2022, amid rising inflation and construction costs. According to the Central Statistical Bureau (CSB), the value add of the construction industry fell by 8.4% year-on-year (YoY) in Q1 2022, marking the third consecutive Y-o-Y contraction since Q3 2021.

Construction costs have soared in the recent months, owing to rising materials and labor costs. This largely reflects the rise in import costs, owing to close trade links with Russia and Ukraine, on top of global supply chain disruptions and high energy costs putting additional pressure on costs. Further increases are expected throughout 2022, owing to the impact of the Russia-Ukraine conflict on global supply chains and energy markets. According to the CSB, construction costs in Latvia rose by 18.8% YoY in the first five months of 2022. By segments, the prices of building materials grew by 26.1%, maintenance and operational costs of machinery and equipment by 17.7%, while labour costs rose by 8.1%.

Assuming greater macroeconomic stability in 2023, the construction industry is expected to post a relatively moderate growth of 3.3% next year, before registering an annual average growth rate of 2.9% between 2024 and 2026. The industry’s output over the forecast period will be supported by investments in transport, electricity, and housing projects. The industry’s output over the forecast period will also be supported by EU funds, for implementing the investment and reform measures outlined in the country’s recovery and resilience plan. The country is set to receive EUR1.8 billion ($2.2 billion) in total, in the form of grants, under the NextGenerationEU recovery fund. In September 2021, the European Commission (EC) disbursed EUR237 million ($283.1 million) to the country in pre-financing, equivalent to 13% of the total financing committed to Latvia.

The report provides detailed market analysis, information and insights into Latvia’s construction industry, including -

• Latvia’s construction industry's growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Latvia’s construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline

Scope

This report provides a comprehensive analysis of the construction industry in Latvia. It provides -

• Historical (2017-2021) and forecast (2022-2026) valuations of the construction industry in Latvia, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using GlobalData's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.