Why this is important to Wisconsin businesses: Productivity improvements will be key to maintaining the economies' positive growth, and they will be looking to import machinery.
The economies of Estonia, Lithuania and Latvia have healthy growth rates, but are facing the challenge of rising wages. In Latvia, earnings increased by 8.2 percent in 2015 due to lack of well-trained staff, as competition among employers for qualified workers drove wages up. Since the country has attained EU membership, 12.8 percent of inhabitants have left, many taking jobs in EU states with higher wages. Latvia’s economy is also held back by outdated machinery, making technology an important path for further growth. Almost 30 percent of €4.4 billion EU funds in Estonia and 25 percent of €5.6 billion in Latvia will be invested in competitiveness through 2020. Additionally, major infrastructure projects are planned. Together, these factors contribute to a high demand for new or modernized machinery to improve productivity in manufacturing.
Estonia imported machinery worth €81.9 million in 2015, and more than 60 percent of this was spent on U.S.-made machinery. The harvesting and forestry sectors have especially high demand, making up 20 percent of Estonia’s machinery imports. Increased exports to Estonia are predicted for U.S.-made commercial and service industry machinery, already reaching the 2015 total of $7 million by September of 2016 . Lithuania’s investment in new machinery is estimated to increase by 7 percent in 2017. Harvesting and forestry are of major importance, accounting for approximately 25 percent of all machinery imports. U.S. metalworking exports to Lithuania also rose significantly in 2016, reaching the total value for 2015 ($2 million) by September. The outlook for Latvia is positive too, with predicted growth of gross fixed capital formation of 2 percent in 2016 and 4.5 percent in 2017. Imports from the U.S. of commercial industry machinery displays significantly rose, totaling $7 million by September 2016 versus $5 million in all of 2015.
Wisconsin firms gained earnings from the Baltics of $13 million in 2015. Half of the total came from exports of parts for machinery, and about 25 percent from electrical machinery, liquefying machinery and temperature change equipment. Wisconsin producers of metalworking, harvesting and forestry machinery wishing to enter the Baltic markets can consider a trade show as a first step. These include Tech Industry (Riga), Balttechnika (Vilnius) or Estbuild (Tallinn).