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.