Estonian industrial production expanded 4.6% y/y in August, working-day adjusted data from Statistics Estonia showed on September 29.

The August expansion is 0.1pp short of the annual reading for July, keeping output at a somewhat subdued level compared to March-June when production growth reached 10% or more. Still, the growth in August extends a positive trend that began in September last year, reinforcing forecasts that the Estonian economy is well on track to pick up speed in 2017.

Estonian GDP grew 1.6% in 2016, improving on the six-year low of 1.1% the preceding year. The economy made a good start to 2017, with first quarter GDP growing 4.4% and surging to 5.7% y/y in April-June. Expansion forecasts for 2017 range from 2.3% by the European Commission to beyond 3.5%, according to Swedbank.

In unadjusted annual terms, industrial production grew 4.6% as well. In seasonally adjusted monthly terms, output did not change.

Production growth was driven by growth in the manufacturing and mining segments, where output expanded 5.5% and 16.9% on an annual basis, respectively. Energy production fell 11.7% y/y.

Most manufacturing sub-segments increased output, save for computers, electronics and optical products, and furniture.

Around 66% of industrial output was sold on the external market, Statistics Estonia also reported. According to unadjusted data, export sales of manufacturing production grew 3% y/y in August, while domestic sales rose 7% y/y. The annual figures for July were 5% and 13%, respectively.