Latvia Construction Industry Report 2022: An Annual Decline of 7% in Real Terms in 2021, Following an Expansion of 1.5% in 2020 - Forecasts to 2026 -

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DUBLIN, May 24, 2022--(BUSINESS WIRE)--The "Latvia Construction Market Size, Trends and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2022-2026" report has been added to's offering.

The construction industry in Latvia registered an annual decline of 7% in real terms in 2021, following an expansion of 1.5% in 2020

The industry's output in 2021 was affected by a fall in all three subsectors of construction: building construction; civil engineering works; and specialized construction activities. The government imposed a four-week Coronavirus (COVID-19) lockdown in Latvia from 21st October to 15th November 2021, in response to the surging COVID-19 infections and a poor vaccination rate.

Although construction activities were not halted during this period, work is expected to have been affected by weak investor confidence amid restrictions on certain business operations. Latvia's economic outlook is positive, however, and its economy is expected to remain stable over the coming quarters, owing to its relatively low government debt levels and low debt servicing costs. Construction industry growth is therefore likely to be driven significantly by government investment, which will also help dampen the effects of external inflationary pressures on output growth.

The industry is expected to register an annual growth of 6.6% in real terms in 2022, before registering an annual average growth of 3% from 2023 to 2026. The sector's output over the forecast period will be supported by investments on transport, electricity, and housing projects.

In November 2021, Latvia's Parliament (Saeima) passed the 2022 State Budget, which includes an expenditure of EUR12.4 billion ($14.7 billion) in 2022 - marking a 15.3% increase on spending in 2021. The budget includes an allocation of EUR327.3 million ($387.2 million) for improving the quality and safety of state roads, developing infrastructure for pedestrians and cyclists, and continuing the construction of the Kekava bypass in 2022.

Forecast-period growth will also be buoyed by the European Union's (EU) financial support to Latvia, for implementing the investment and reform measures outlined in the country's recovery and resilience plan. The country is set to receive a total of EUR1.8 billion ($2.2 billion) in the form of grants under the NextGenerationEU investment fund.

In September 2021, the European Commission disbursed EUR237 million ($288.3 million) to the country in pre-financing, equivalent to 13% of the total financing committed to Latvia. The plan includes EUR158 million ($192.2 million) on reforms and investments to modernize healthcare, strengthen the resilience of the healthcare sector, and increase the availability of integrated and high-quality healthcare services.

A sharp rise in construction prices could, however, pose a downside risk to the industry's output in the short to medium term. According to the Central Statistical Bureau (CSB), the level of construction costs in Latvia rose by 14.2% in 2021. By segments, the prices of building materials grew by 20.4% in 2021, as well as maintenance and operational costs of machinery and equipment by 9.6% and labour remuneration of workers by 5.9%.

Moreover, soaring construction costs are exacerbated by the current Russia-Ukraine war, which is causing global energy prices to rise to record levels. As Latvia borders Russia, uncertainty surrounding the war is likely to weigh on investor confidence, as the country risks being pulled into the conflict if a severe escalation occurs. In response, NATO has already amassed troops in the Baltic region as a precaution against further Russian aggression.


  • 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 the publisher'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 the publisher's critical and actionable insight

  • Assess business risks, including cost, regulatory and competitive pressures

  • Evaluate competitive risk and success factors

Key Topics Covered:

1. Construction Outlook

2. Construction Industry: At-a-Glance

3. Latest News and Developments

4. Project Analytics

5. Construction Market Data

6. Risk Profile

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