[ad_1]
Modified forecasts
The impact of the pandemic will not last long. But, how to help a company not to be left alone in the search for new markets for its products? This topic is particularly relevant for companies. But to make predictions, you also need to look at how companies traded abroad last year.
According to Jonė Kalendienė, Head of the Research and Analysis Department at Verslios Lietuvos, exports contracted by 5.4 percent last year, but the total value of exports of goods and services decreased by 1.3 percent. This shows that the biggest negative impact was due to falling oil prices, not product volumes.
2020 is said to have been a very successful year for the chemical industry, whose exports grew by 14.6 percent.
“The beginning of last year did not promise anything good, but in the second half of the year the Lithuanian producers were lucky.
Exclusive was the export of reagents, which grew one and a half times last year and accounted for four-fifths of the total exports of the chemical industry.
The second successful sector is agriculture, where the growth of product exports, which will reach 34%, was the one that contributed the most to the growth of total exports. This is related to the success of the grain and rapeseed trade, “said J. Kalendienė.
According to her, the second quarter of last year was the darkest, but in the second half of the year Lithuanian producers adapted to the change in situation and exports increased in all sectors.
But what will happen this year?
“Last year’s trends led us to improve the overall forecast for exports this year,” said 6.7 percent. growth, which would be around one billion. euros.
Exports of goods are expected to grow again steadily, to around 7%. And services exports, which fell more than 9% last year, are expected to grow almost as much this year.
Some of the developments in the pandemic that we saw late last year and early in the year inspire us with optimism. Exports of services, on the other hand, are the most affected. You have already reached the lowest point: the fall is nowhere to be found. So even for this reason it should increase “, – J. Kalendienė shared his ideas.
Remaining threats
According to J. Kalendienė, the positive factors influencing expectations related to export growth are the constantly improving forecasts of their indicators for EU countries.
“All international organizations forecast economic growth in the main export markets that are important to us.
Another positive moment is the increase in oil prices. They are expected to increase 4 percent this year. This is important because the value of exports is strongly related to them.
It is also important that companies have the production capacity, both capital and employees. Therefore, there are no major obstacles preventing them from meeting the growing demand for products or services, ”said J. Kalendienė.
However, according to her, the great uncertainty persists: it is impossible to miss the development of a pandemic.
“At the moment, it seems that the business has adapted, but the pandemic can still cause unpleasant surprises. There are many risks that are unpredictable.
Another major threat to export development is Brexit. Its impact is not yet clear and companies will still have to adapt to new business conditions with the UK.
The third threat is the EC mobility package, which has had a negative impact on transport companies. We constantly hear rumors from operators that companies are relocating to other EU countries. Therefore, there is a risk that exports of transport services will not develop as they would like. And it generates a large part of the gross domestic product ”, said the specialist.
Focus on high tech
According to the Vice Minister of Economy and Innovation, Jovita Neliupšienė, innovative industrial products are very important for export growth. Therefore, to promote it, it is necessary to increase the volume of development of high added value products, and at the same time their quality.
“Exports of high-tech services must grow faster than the total. Furniture, food and beverages are traditional export areas, but growth in the trade in biotechnology, medical devices and information technology is also needed.
The third important factor in promoting exports is state aid – the expansion of Lithuania’s network of economic representation in the world. These positions must be strengthened in Germany, the Scandinavian countries and the United States.
South and Southeast Asia is another place for economic representations. A business attaché is needed in Japan, Singapore, South Korea, Taiwan.
Researching new markets is also important: it is necessary to anticipate needs and thus help exporting companies ”, said J. Neliupšienė.
Turned into technology
According to Daina Kleponė, director of Verslios Lietuvos, there are several business opportunities increased by the pandemic, which should not be ignored.
“The value of quarantine and trade restrictions is to focus more on digital technologies.
The changes in the so-called value chains are very large. Several Western European companies received additional orders from Asia, but were unable to implement them due to broken chains.
Our advantages are flexibility and quality. We save those chains. A couple of important paths remain for the industry: the highest possible productivity achieved through the introduction of new technologies and robotics.
And at the same time, electronic commerce. Over the last year, it has grown by almost a third, “said D. Kleponė.
Exports in 2020 – in more detail
In foreign markets, on which the Lithuanian economy relies heavily on exports, the economic downturn has had a much lesser impact on the performance of Lithuanian exporting companies than expected in the early 2020s.
The reason for this was the less-than-average decline in the economies of the EU’s Nordic region, Lithuania’s main export partners.
Regarding economic sectors, the greatest positive impact on export growth last year was had by exports of tobacco products, agricultural products, waste exports – mainly scrap metal – and to a lesser extent the chemical industry, more precisely – reagent exports.
Meanwhile, last year’s exports were negatively affected by declining exports of apparel and textiles, furniture and wood, engineering, food and beverages.
The smoke makers have jumped
Exports of the tobacco products industry, which contributed most positively to annual export growth, increased by 34% year-on-year in 2020. Their growth was observed in the block of EU countries: the Netherlands, Belgium, Sweden, Austria.
Given that most of Lithuania’s tobacco exports are made up of the products of an international manufacturer, changes in export markets are likely to be more related to the optimization of the company’s production and logistics processes.
Export growth in 2020 Waste exports, mainly scrap, also contributed significantly.
Exports from the waste collection sector grew mainly due to exports of precious and ferrous metal scrap and their waste. Scrap and waste exports increased by 40%, mainly to the EU market, while ferrous scrap exports increased by around 50%, mainly to the Turkish market.
Recession – in the textile sector
Last year, exports of the clothing, textile and leather products industry declined in all groups of export markets (EU, CIS and other countries).
The biggest drop in exports was seen in Sweden, the UK and Germany, while the fastest growing markets during the year were the Netherlands, Australia and Saudi Arabia.
The decline in orders from this industry had the biggest impact on the decline in order volumes, prices were slightly higher than in 2019.
The value of exports from the furniture and wood industry decreased by almost 3% during the year. Industry accounted for most of the contraction, at about 40 percent. – exports of wood products.
The impact of the COVID-19 virus on the economic activity of the EU and other countries had a greater negative impact on the development of Lithuanian services exports (-9.2%).
2020 Exports of services grew 10.6% in the first quarter. In the second quarter, its fall was 20.6 percent. per year, mainly due to the decrease in exports of travel, transportation and other business services. And then at the end of the year, it had fallen.
