Page 49 - CE Outlook Regions 2023

One of the other challenges the Baltics face is labour availability and
practical and professional skills. The lack of the labour force in the long
term could really affect the possibility to raise the productivity of Baltic
industry. The ageing population and poor demographic indicators will
have to be addressed.

Although some expect that the Ukrainian refugees – around 150,000
fled to the Baltic states following the war – will give a boost to the
labour market, this is doubtful. Many of them are low-skilled workers,
besides the states had to allot significant funds to accommodate them
and pay social allowances.

Responding to the lack of labour force, Baltic industry needs to intensify
the use of various IoT solutions to improve production processes. The
Baltic states will have to pay special attention to the integration of new
technology solutions into manufacturing companies in 2023 and
beyond.

Since manufacturing industry is energy intensive, many Baltic
companies struggled in 2022 and will likely struggle in 2023 despite
government support. Energy efficiency is one more aspect to improve
to stabilise the development of industry

3.2.4 Energy & power

With the region’s dependence on imported energy – one of the leading
factors of historically high inflation – it’s vital for the Baltic states to
develop domestic energy production and support the transition to green
energy. Renewable energy and green transition are high on the agenda
in all three Baltic states.

In 2023, the region will most likely make concrete the plans for building
compact nuclear plants after 2028, in particular Lithuania and Estonia.
Amid the crises, Estonia resumed production of electricity in its shale
oil-fired plants, which had been previously been mothballed under a EU
directive.

3.2.5 Construction

The real estate market, especially its residential sector, stagnated in the
second half of 2022 and was expected to remain such in the entire
Baltic states throughout 2023.

Potential homebuyers will remain cautious and won’t rush their
decision-making when it comes to buying a dwelling, whereas home
sellers will be trying in 2023 to find a balance between their own
expectations, and the real estate market price.

49 CE Outlook 2023 www.intellinews.com