Lithuanian manufacturers record a drop in orders not seen since the financial crisis

Lithuanian manufacturers record a very significant drop in orders in export markets, the scale of which resembles the times of the global financial crisis, says economist Aleksandras Izgorodins. According to him, it seems that the challenges that plagued Lithuanian industry in the first quarter will continue in the second quarter as well.

“Surveys by the European Commission show that in April of this year, the opinion of Lithuanian industrial companies about stocks of manufactured products rose to a level that was last recorded in 2009. in January – when Lithuanian industry suffered from the effects of the global financial crisis.

This indicator shows that the Lithuanian industry is finding it increasingly difficult to sell the manufactured products, which are filling the warehouses more and more. The fact that the index of stocks of manufactured goods rose up to 2009. January’s level shows that Lithuanian manufacturers record a very significant drop in orders in export markets, the scale of which is reminiscent of the times of the global financial crisis,” A. Izgorodins wrote on Facebook on Monday.

The economist added that the growing stock of manufactured products in warehouses sends a bad signal about the prospects of Lithuanian industrial production: full warehouses of unrealized production will encourage Lithuanian manufacturers to reduce production volumes and focus on the realization of already manufactured products, rather than on the production of new products.

According to him, this is also shown by the production forecasts of Lithuanian industrial companies. In April, they were the worst since 2023. beginning

“The main reason for the decline in the expectations and actual production volumes of the Lithuanian industry is the rapid fall in the consumption of non-essential goods in the European Union markets. For example, in March, the volume of retail trade in non-food goods decreased by 7.3% in Germany, by 14.2% in Sweden, and by 6.5% in Finland. etc

In Europe, de facto, we already have a significant consumption recession, which will only get stronger in the near future, as the European Central Bank will increase the base interest rates several times, which will further pressure the consumption cycles in the euro zone countries. The high interest burden will also limit consumption in non-euro area EU markets, such as Sweden, where consumption trends are extremely negative.

I think that Lithuanian exporters must prepare for a significant decrease in order volumes in the second quarter of this year, not a technical one,” said A. Izgorodinas.

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2023-05-22 09:57:01

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