Business Monitor International


Latvia Infrastructure Report

Published 17 January 2014

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Latvia Infrastructure Report

BMI View: Although economic fundamentals in Latvia remain fairly supportive, we see only modest opportunities for growth in the country's construction sector. We anticipate industry growth to slow over the forecast period , with average year-on-year (y-o-y) growth of 4.8% expected between 2014 and 2023. The residential and non-residential construction sector will gradually regain its dominance in the overall industry at the expense on the infrastructure sub-segment, which will struggle with limited funding.

In 2013, we estimate the construction sector to have grown by a further 9.0% y-o-y in real terms, as confidence in the sector is very much intact. The construction sector posted impressive growth during the first three quarters of 2013, with output up by 9.8% y-o-y, 5.3% y-o-y and 11.6% y-o-y respectively during Q113, Q213 and Q313, according to Latvia Statistics estimates.

Key developments in the sector:

  • The country's railways infrastructure will be boosted by the government's plans to upgrade its east-west railway corridor, which connects Latvian ports on the Baltic Sea with Russia and Belarus. In May 2013, the Nordic Investment Bank (NIB) signed a 10-year, EUR17mmn loan agreement with Latvian state railway company VAS Latvijas . The loan will be used to build a second track on the 52-kilometre (km) Skriveri-Krustpils section of the corridor.

  • The Riga International Airport is undertaking construction work in a project estimated to cost LVL66.9mn, in order to increase its capacity. In November 2012, the airport awarded the contract for the project to a consortium comprising FCC, Hochtief and ACB. 61% of the total costs are to be met by the Cohesion Fund, while the remainder is to be financed by the airport. Completion is due by September 2014.

  • In view of the growing public support towards renewable energy, Finnish power company Fortum, from September 2013, commenced commercial operations at a new Latvian power plant, reports...

Table of Contents

BMI Industry View
7
SWOT
9
Infrastructure SWOT
9
Industry Forecast
10
Construction And Infrastructure Forecast Scenario
10
Table: Latvia's Construction And Infrastructure Industry, Data And Forecasts, 2012-2017
10
Table: Latvia's Construction And Infrastructure Industry, Long-Term Forecasts, 2018-2023
11
Transport Infrastructure - Outlook And Overview
14
Table: Latvia's Transport Infrastructure Industry, Historical Data And Forecasts, 2012-2017
14
Table: Latvia's Transport Infrastructure, Long-Term Forecasts, 2018-2023
15
Table: Major Projects - Transport
16
Energy And Utilities Infrastructure - Outlook And Overview
17
Table: Latvia's Energy And Utilities Infrastructure Industry, Historical Data And Forecasts, 2012-2017
17
Table: Latvia's Energy And Utilities Infrastructure, Long-Term Forecasts, 2018-2023
18
Table: Major Projects - Energy And Utilities
19
Residential/Non-Residential Building - Outlook And Overview
20
Table: Residential/Non-Residential Building Industry Data
20
Table: Residential/Non-Residential Building Industry Data
20
Industry Risk Reward Ratings
22
Latvia - Infrastructure Risk/Reward Ratings
22
Rewards
22
Risks
22
Central And Eastern Europe - Infrastructure Risk/Reward Ratings
23
Table: Central And Eastern Europe Risk/Reward Ratings
29
Market Overview
30
Competitive Landscape
30
Company Profile
31
BMGS
31
Merko Ehitus
33
LEC
35
Global Infrastructure Overview
36
Global Industry Overview
36
Table: Latin America PPP Round-Up
40
Methodology
45
Industry Forecast Methodology
45
Sector-Specific Methodology
46
Risk/Reward Rating Methodology
50
Sector-Specific Methodology
51
Table: Infrastructure Risk/Reward Rating Indicators
51
Table: Weighting Of Indicators
52

The Latvia Infrastructure Report features Business Monitor International (BMI)'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.

Key Benefits

  • 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).

Coverage

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 multinational and national company developments.

These are broken down into Construction (social, commercial and residential), Transport (roads, railways, ports, airports etc), and Energy & Utilities (powerplants, renewable projects, pipelines and so on).

Industry Trends

Analysis of latest projects across the infrastructure sector (covering the transport, utilities and commercial construction sub-sectors) - including:

Market Overview:Analysis of the key elements driving developments, including evaluations of current capacity and future requirements.

Building Materials Overview

The building materials overview provides industry trend analysis on the global and regional demands for building materials and the impact of this on the emerging and developed markets.

Business Environment Ratings

BMI's Infrastructure Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (construction companies, suppliers and partners) in the regional infrastructure market.

The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data point.

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 & Economic Forecasts

Historic data series (2008-2012) and forecasts to end-2018 for all key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecast. Indicators include:

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%).

Infrastructure: Value (US$bn); contribution to construction industry (%); real growth (%) of transport infrastructure (broken down by railways, airports, roads and bridges, ports and harbours) and energy and utilities (broken down by power plants and transmission grids, oil and gas pipelines, and water infrastructure).

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$).

Company Profiles

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 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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc