Business sentiment improves in construction and services in Latvia
Business confidence indicators in Latvia rose in August in both the services and construction sectors, while the overall economic sentiment indicator remained unchanged. At the same time, employment expectations weakened to their lowest level since autumn 2024.
Seasonally adjusted data show that business sentiment among Latvian companies improved in several sectors of the economy in August. The confidence indicator in the services sector reached 5.5 points, up nearly two percentage points from July. The most optimistic businesses were in film, video, television programme and sound recording production, where the indicator reached its highest level since the sector was included in the survey more than a decade ago. Strong results were also recorded in financial services, information services and the travel and tourism sector. By contrast, the most pessimistic sentiment remained among security and investigation service providers, as well as catering and staffing/recruitment companies. Overall, 21 of the 30 services subsectors surveyed showed positive sentiment.
Construction and manufacturing
In construction, sentiment rebounded after a decline the previous month, with the confidence indicator reaching 7.6 points. Improvement was seen across all subsectors — building construction, specialised construction works, and civil engineering, where the increase was strongest. In manufacturing, the confidence indicator remains negative, but has been gradually improving for a third consecutive month. Among the largest subsectors, sentiment worsened only in food production.
Retail trade and uncertainty
Retail trade sentiment stayed positive in August but changed little from the previous month. Confidence remained high in the trade of vehicle parts and accessories, while sentiment in car sales itself returned to near zero. In fuel retail, which saw a sharp drop earlier in the summer, conditions continue to gradually improve, though the indicator remains low. Economic uncertainty declined in manufacturing, retail trade and services, reaching this year's lowest levels in each, while it rose in construction. Latvia's overall economic sentiment indicator held steady from the previous month, while the employment expectations indicator fell to its lowest level since September 2024.
