Industry

In 2010, Lithuania’s economy was rapidly growing. Though the Lithuanians were not in a hurry to open their purses, exports boosted greatly. Business made use of strengthening of economies of the European countries, found new markets and new buyers. On the whole, the entire industry that was oriented towards foreign trade grew.

The gross domestic product (GDP) was on the increase during all quarters of the year, and the year’s achievements – the 1.3 per cent growth – made the largest Baltic States that was exhausted by the crises really happy.

Industry is growing
The year of 2010 was the year of growth of Lithuania’s industry. It is true, not for all. Why? The reasons are quite clear – only those industries grew, which managed to find orders abroad, whereas those that depended on domestic consumption were on the decline. Last year consumption of the Lithuanians was still in the state of stagnation – people opened their purses very unwillingly as compared with the users of other European states. However, the country’s economy, which at the end of February was still in the minus, was recording a one-per cent growth in March, and in November it reached the record –17.1 per cent.

Hence, in 2008-2009, after facing severe economic ordeals, manufacturing enterprises recovered. Demand for their products abroad roused the manufacturers. Last March Lithuanian industry began to grow following a 17-month break – economic recession took that long.
In April, however, the growth of Lithuanian industry was most rapid in the whole of the European Union.

Two thirds of products – abroad
Manufacturing industry showed the most obvious signs of recovery – the 8.3-per cent growth. Processing of oil and milk rose. However, it was exports that encouraged that growth. On the whole, 66.5 per cent of all products manufactured in Lithuania were exported to foreign countries last year.

It is true, the recovery of manufacturing itself was not even in Lithuania. Some branches of industry, for example, paper, pharmacy and chemistry industries, have already come close to and even exceeded the heights of all times. Hence, a more rapid recovery of manufacturing depended on how that branch of industry was oriented towards foreign markets. Those industries that oriented themselves towards the domestic market could not recover so fast.

Manufacturers of rubber and plastic products, wooden products, furniture and clothes sold abroad grew more rapidly than in the heyday. Food production, however, continued to shrink.

It can be stated that industrial products are more and more oriented towards foreign markets. Industrial products were on the increase almost in all those spheres. The scope of production has decreased a little, by as much as 0.6 per cent, in manufacture of food products, volumes in electricity generation, sale and distribution decreased by as much as 14 per cent.

Logistics and the carriers cause surprise
Apart from manufacture of oil products, which accounts for about one third of all manufacturing industry, food production is the largest branch constituting approximately one sixth of the country’s total production. Decreasing domestic demand on which manufacturers of food products are still dependant to a great degree, made recovery of this industry more difficult.

Last year sectors of construction, retail trade and agriculture could not boast of good results. These branches of industry are more dependent on domestic consumption therefore their growth is forecasted in the future when Lithuanians open their purses wider in their own country. The sectors of energy, transport and communications were on the increase. Last year logistics and transportation business surprised analysts in Lithuania. It was the transportation activity that was most severely hit by the crisis, however, carriers and warehousing business recovered fastest. It is true, the Lithuanians have to be grateful to the users of the western countries and the exporters of their own country for that.

Construction work looks forward to a favourable situation
Analysts call the year 2010 in Lithuania the year of stagnation in building dwelling-houses. As few as 2899 new dwelling houses with 3667 flats were built, which accounts for as little as 39 per cent of all the flats built in 2009. Banks were not too willing to give loans and margins increased dramatically. It is true, building of individual houses prevailed in Lithuania. Last year as many as 2877 houses were built. Hence, general statistics of construction lagged by as much as 5.6 per cent behind that in 2009, and the total amount of work done totalled 5,4 billion litas.

Still greater fall was observed in construction of non-residential houses – by as much as 63 per cent less than the year before last. It is true, the building market that was dying during the crisis in Lithuania started to recover only in the third quarter of the year. This is testified to by an increased number of building licences issued. Finally the “ice” in cooperation between construction of real estate and banks started to melt. Hence, the fact that banks started to untie cash flows more bravely determined recovery of the building sector. It is true, more movements were recorded in the capital city, whereas real estate market in a province was still stagnant.

Prices helped agriculture out
Similarly to the case of fertilizers, in 2010, Lithuania’s agriculture was supported by the increased purchase prices. In 2010, value-added in agriculture at the prices of that time totalled 2,3 billion litas and was as much as 13.5 per cent higher than that in 2009. This was determined by 13.6 per cent higher purchase prices of agricultural products. Manufactured agricultural products totalled 6,4 billion litas, which is as much as 7.9 per cent more than in 2009. Though grain and potato crops were poorer, a higher purchase price saved farmers from losses. The grain purchase price increased especially considerably – by as much as 22.6 per cent, that of potatoes – by 21.3 per cent, and the price of rape seeds grew by as much as 20.7 per cent.

Livestock production grew because of the increased number of animals and birds, whereas milk yield decreased, and collection of eggs dropped by as much as 5 per cent. Purchase prices of animal and livestock products increased by 10.3 per cent; hence, in this case losses were avoided. There is no doubt that last year agriculture was supported by European Union Structural Assistance. Food production was one of the few branches of manufacturing industry whose volumes were on the decrease last year too.

Inspiring examples are found in investments
According to the speed of the broadband Internet, Lithuania takes place two in the world, it lags behind South Korea only. However, according to statistics of innovations and high technologies, it is far behind the average of the European Union. In 2009–2010, Lithuania took place 39 among 132 states in the Global Innovation Index. In 2010, creation of high and medium-high technologies in Lithuania accounted for 5-6 per cent of value added and GDP created in the country. Specialists note that such small figures should not surprise us because the greatest pride of Lithuanian high technologies – branches of laser and biotechnology industries are quite small. For example, about as many as 450 people work in the sector of laser and light science and technologies, and total turnover of the companies is about 120 billion litas.

Nonetheless, Lithuania has what to be proud of. Some Lithuanian companies create such exceptional production that they have only one or two rivals in the world each. Only several companies in the world create such biometric technologies as the employees of the private company Neurotechnology operating in Lithuania. The Lithuanian company Geola Digital, which has only three rivals, is the initiator of digital holograms done by means of optic laser in the world. In 2009, the Company put on the market the technology allowing the digital 3D hologram to be created from the recording made by a mobile phone. The Company Teltonika, which annually puts new products on the market, plans to create as many as 400 new jobs in Lithuania in 2011. Modern technology companies that do not have any earlier experimental knowledge and practice are gradually winning international recognition. The mobile applications company GetJar, and its founder and manager Ilja Laurs who became world-known several years ago, was finally noticed in Lithuania last year too. According to the number of programs downloaded from its portal this Lithuanian company is inferior to the powerful Apple Company only. A year ago, the Company Precizika-MET SC opened the first solar batteries production line, which created Lithuanian solar batteries production technology. At the end of 2010, the Company BOD Group started building a solar batteries plant in Lithuania in which a scientific research centre is going to operate.

More cargoes in the port
Last year Klaipėda seaport, the only port in Lithuania, showed strong signs of growth. In January of this year, it took a leading position among the Baltic States according to the number of cargoes. During the year 2010, a total of 31,27 tons of marine cargoes was loaded in Klaipëda seaport, which is as much as 12.2 times more than the year before last. According to cargo turnover in the Baltic States, Klaipëda seaport outdid our neighbours Latvians but was inferior to Tallinn seaport only. However, in January, the Lithuanians outdid the seaport of the Estonian capital. Increased purchase of fertilizers contributed to the growth of the sea port too (21.6 per cent more). The recovered carrier business ensured the growth of container reloading throughout the entire year (31 per cent more). It is true, as much as 7.7 per cent fewer vessels sailed in the port, however the number of passengers increased by as much as 18 per cent – up to 321 thousand.