Estonian industrial production returns to form as it falls in May

Estonian industrial production returns to form as it falls in May
By bne IntelliNews July 1, 2016

Estonian industrial production fell 2% y/y in May, working-day adjusted data from Statistics Estonia showed on July 1. 

The reading marks a return to contraction after output registered its first expansion in seven months in April. That rise now appears to have been a blip that will struggle to provide any confidence that the Estonian economy will pick up speed soon.
The Baltic state’s GDP grew just 1.1% y/y in 2015, the slowest in six years. The economy improved somewhat in the first quarter, growing 1.7% y/y.

In monthly terms, industrial production declined 3.3%. Output in the energy sector weighed down upon the headline figure, contracting 19.9% y/y, Statistics Estonia noted. Production in mining also fell considerably, by 12.5%. Manufacturing managed to show expansion, although by the rather insignificant margin of 0.5%. 

Inside the manufacturing segment, most sectors recorded growth, except for food products, which fell 3.8% and machinery and equipment, which contracted 3.9%. The biggest growth – 7.7% - came in computer, electronic and optical products. About 70% of total output was sold on the external market, as has been the case for several months.

The European Commission forecasts Estonian growth at 1.9% in 2016 in its spring economic forecast, published in May. That is an upward revision from 1.6% predicted in February.