Decline of industrial production decelerates to 3.9% y/y in Estonia

The decline of industrial production decelerated to 3.9% y/y in October, from 4.4% y/y in September, according to figures of the statistical office, published on Tuesday. Output of the manufacturing sector increased by 0.1% y/y, following a decline of 0.8% y/y in September. The recovery was supported by the production of metal products, wood, beverages and some transport equipment, in addition to the repair and installation of machinery and equipment. Meanwhile, the decline in the output of the utility sector slowed down slightly to 28.3% y/y, but nevertheless remained in negative territory for the ninth consecutive month.

Looking at the alternative data breakdown, the output of intermediate goods increased by 1.0% y/y. On the other hand, production growth of capital goods slowed down to 1.6% y/y, down to its lowest level since December last year, which does not bode so well for exports of high value-added products. The production of consumer durables declined by 8.3% y/y, while that of non-durable consumer goods fell by 0.7% y/y.

To note, industrial production fell by 0.4% y/y on average by in the first ten months of the year, which compared negatively to the same period last year. Looking ahead, we do not expect any significant recovery of the industrial sector in the coming months, given projections for moderating demand among Estonia’s key trading partners.

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