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
5
SWOT Analysis
6
Latvia Infrastructure Industry SWOT
6
Market Overview
7
Building Materials
8
Europe
8
Table: Cement Price / Volume, % Variance (6M11/6M12)
12
Industry Forecast Scenario
13
Table: Latvia Construction And Infrastructure Industry Data, 2010-2016
13
Table: Latvia Construction And Infrastructure Long Term Forecast, 2015-2021
14
Construction and Infrastructure Forecast Scenario
16
Transport Infrastructure
18
Table: Latvia Transport Infrastructure Industry Data, 2010-2016
18
Table: Latvia Transport Infrastructure Long Term Forecasts, 2015-2021
18
Transport Infrastructure Outlook and Overview
19
Major Projects Table - Transport
20
Energy and Utilities Infrastructure
21
Table: Latvia Energy and Utilities Infrastructure Industry Data, 2010-2016
21
Table: Latvia Energy and Utilities Infrastructure Long Term Forecasts, 2015-2021
21
Energy and Utilities Infrastructure Outlook and Overview
22
Major Projects Table - Energy And Utilities
24
Residential/Non- Residential Construction and Social Infrastructure
25
Table: Latvia Residential and Non-residential Building Industry Data, 2010-2016
25
Table: Latvia Residential and Non-residential Building Long Term Forecasts, 2015-2021
25
Risk/Reward Ratings
26
Latvia's Risk/Reward Ratings
26
Rewards
26
Risks
26
Regional Overview
27
Central and Eastern Europe Infrastructure Risk/Reward Ratings
27
Table: CEE Infrastructure Risk/Reward Ratings, Scores out of 100
29
Company Monitor
30
BMGS
30
Merko Ehitus
31
LEC
32
Global Overview
33
Methodology
40
Industry Forecasts
40
Construction Industry
41
Data Methodology
41
Construction
41
Capital Investment
42
Construction Sector Employment
42
Infrastructure Business Environment Rating
43
Table: Infrastructure Business Environment Indicators
44
Project Finance Ratings
45
Table: Design And Construction Phase
46
Table: Commissioning And Operating Phase - Commercial Construction
47
Table: Commissioning And Operating Phase - Energy And Utilities
48
Table: Commissioning And Operating Phase - Transport
49
Sources
50

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 Rankings

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

The rankings 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