ASSESSMENT OF THE FURNITURE INDUSTRY IN LATVIA

Abstract

The furniture industry plays a very important role in the national economy of Latvia. To make a complete development assessment, it is required to identify the most significant specifics of this industry as well as to analyse key characteristics indicating the development of this industry. Based on the present research, it was concluded that the most significant specifics of the industry were: elasticity of production, production process, and output, low production cost etc. The number of enterprises that were engaged in the furniture industry in Latvia decreased, therefore, the number of employees proportionally declined in this industry. The majority of these enterprises were micro-enterprises that employed less than 9 people. Although the number of small and medium enterprises was 25 in 2009, the number of employees in these enterprises accounted for 45.1% of the total number of employees in the furniture industry: in medium – 33.0 and in small ones – 12.1%-points. At enterprises employing from 50 to 249 employees, on average, 98 specialists, while in large enterprises – 264 people – were employed. It is essential to assess the changes that occurred in the furniture industry, so that companies of this industry would further maintain their competitiveness and expansion, avoid possible losses and business interruption or decreases in output, as well as provide a greater contribution to the growth of Latvia’s national economy. The research aim is to make an assessment of the furniture industry to obtain a proof for the research hypothesis: Latvia’s furniture industry has potential for higher production indices. To achieve the aim, the following research tasks are set: 1) to provide characteristics of the furniture industry, identifying the specifics of it; 2) to analyse indicators of the furniture industry of Latvia in the period 2006-2010. Various research methods were employed in the present research: general research methods – the monographic method, analysis, synthesis, the abstract and logical methods; data acquisition and processing methods – statistical analysis, the graphic method, and time series analysis. Databases of the Central Statistical Bureau (CSB) of Latvia, and Eurostat, reports and reviews of national government institutions on the forest, timber, and furniture industries, research papers of foreign and Latvian scientists, research findings, methodological literature, periodicals on business and furniture production and the Internet etc. were used in the present research. Owing to the economic recession, sharp decrease in the main indicators of furniture industry occurred in Latvia. In furniture industry operated for 21% fewer enterprises in 2010, compared with 2008, and enterprises employed for 50% less professionals than in 2006. Consequently, turnover of the furniture manufacturing and value added fell by 41-43% and decrease of the productivity of enterprises reached 23%, compared with 2007. On the whole, one can conclude that furniture industry in Latvia has potential for higher production indices, reaching level of 2006-2007 indicators. Along with the domestic demand growth and demand changes in the partner countries of foreign trade, including EU countries, the export has significant role in the furniture industry stabilization and further development. DOI: http://dx.doi.org/10.5755/j01.eis.0.7.4121