In May business environment had a positive trend in construction and manufacturing

Data of business tendency surveys¹ carried out by the Central Statistical Bureau (CSB) show that in May 2025, compared to April, business environment has improved in manufacturing and construction, but worsened in retail trade and services sector.

Continuously negative business environment has improved significantly in construction

Typically low confidence indicator in construction, according to seasonally adjusted data, was - 7.6 in May and, compared to April, it has risen by 3.0 percentage points, reaching the highest value since February 2022.

Due to the seasonality of construction sector, business environment usually reaches its highest value of the year in April or May. Also this year, according to seasonally unadjusted data, since the beginning of the year business environment is improving monthly. For the first time since July 2021, in May seasonally unadjusted confidence indicator has reached positive value (1.9). The most optimistic were entrepreneurs in civil engineering (11.6), but in construction of buildings and specialized construction activities confidence indicators are still negative (- 5.1 and - 4.0, respectively), but also in these sectors the environment is more optimistic than usual for this season, thus marking a positive trend.

Manufacturing is also showing the highest environment indicator in several years

In May confidence indicator in manufacturing, according to seasonally adjusted data, was - 3.8 and, compared to the previous month, it has risen by 3.0 percentage points, reaching the highest value since July 2022.

Seasonally unadjusted data show that out of 23 manufacturing sectors surveyed in May, compared to the previous month, in 11 – business environment has improved, in 11 – worsened, but in one – hasn’t changed.

According to seasonally unadjusted data, business environment, compared to April, has improved in manufacture of other non-metallic mineral products and manufacture of electrical equipment (by 7.1 and 4.7 percentage points, respectively). Environment in manufacture of beverages is already positive since the beginning of the year, and in May it has improved by 5.6 percentage points. In turn, compared to the previous month,, business environment has worsened slightly in the following by their share most significant sectors: manufacture of food products, manufacture of wood and of products of wood  (by 0.5 and 1.3 percentage points, respectively). The most pessimistic in May were manufacturers of wearing apparel (- 19.6), as well as manufacturers of computer, electronic and optical products (- 15.5).

Business environment has slightly worsened in retail trade

In May confidence indicator in retail trade was 1.0, according to seasonally adjusted data, and, compared to the previous month, it has reduced by 1.7 percentage points.

Seasonal improvement in business environment in spring is characteristic to retail trade, reaching the maximum values in annual terms in May and June. Also this year confidence indicators in May, according to seasonally unadjusted data, were positive in all sub-sectors of retail trade. In retail trade of food business environment, as compared to the previous month, has improved by 5.1 percentage points, but in retail trade of fuel by 10.9 percentage points. In turn, after a relatively rapid improvement in April, confidence indicator in retail sale of non-food products has reduced by 4.2 percentage points again. The situation is similar also in sale of motor vehicles, where business environment in May, compared to April, has worsened by 4.4 percentage points.

In services sector business environment is worsening, however, remains positive

In the services sector, the seasonally adjusted confidence indicator in May was 1.6, and business environment, compared to April, has deteriorated by 1.2 percentage points.

The most optimistic in May are providers of rental and leasing services (23.9). Enterprises in insurance, where confidence indicator in April had reached the maximum value of the period of several years (37.0), but in May reduced by 14.8 percentage points, are among the most optimistic in May. High confidence indicator was also registered in labour recruitment and provision of personnel (20.3). Also in accommodation environment has improved (21.5), however the rise was mainly due to the seasonal reasons. In total, out of 30 services sub-sectors surveyed in May only in 8 sectors business environment was negative. The same as in the previous month, the most pessimistic were entrepreneurs in warehousing and support activities for transportation (- 7.3), as well as land transport sectors (- 6.3), also in architectural and engineering services confidence indicator, compared to April, has dropped by 8.8 percentage points and is negative (- 6.1).

Economic uncertainty is reducing in all business sectors

Economic Uncertainty Indicator, which describes the predictability of socio-economic situation in the country, in May, compared to the previous month, has decreased in all four business sectors surveyed. The most rapid fall (of 5.3 percentage points) is in manufacturing; in construction and services sector the drop comprises 2.8 percentage points in each, but in retail trade it is 2.4 percentage points. However, as the assessment of consumers² rose significantly, total uncertainty indicator increased by 0.4 percentage points in May.

In May 2025 economic sentiment indicator³ in Latvia comprised 98.6, (98.1 – in the previous month). In turn, Employment Expectations Indicator, which during the last months has been fluctuating around long-term average value (100), in May increased to 101.2 again.

Methodological information:

¹ Business surveys in manufacturing, construction, retail trade and services sector are carried out by the CSB monthly, accordingly methodology of the Joint Harmonised EU Programme of Business and Consumer Surveys co-financed by the European Commission.

² Consumer survey is carried out monthly by the enterprise Latvijas Fakti accordingly methodology of the Joint Harmonised EU Programme of Business and Consumer Surveys co-financed by the European Commission.

³ Economic Sentiment, Employment Expectations Composite Indicators are calculated by the General Directorate of Economic and Financial Affairs of the European Commission (ECFIN) using the results of business tendency surveys conducted by the Member States, according to a common methodology.

Media requests:
Public Relations Section
E-mail: media@csp.gov.lv
Phone: +371 27880666

More information on the data:
Ieva Vanaga
Short-Term Business Statistics Section
E-mail: Ieva.Vanaga@csp.gov.lv
Phone: +371 67366738