Estonian industrial production expanded 2.2% y/y in July, working-day adjusted data from Statistics Estonia showed on August 31.
The reading brings a short, two-month, contraction streak in the Baltic state’s industrial sector to an end. However, in the past 12 months, output only managed to grow four times, with July’s mediocre expansion being the fastest. The growth will therefore have to be repeated in the coming months to restore 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, but faltered in the April-June at just 0.6% expansion.
In monthly terms, industrial production expanded a seasonally adjusted 4.6%. Output in the mining sector remained a drag on the headline figure, as it decreased 11.5% y/y, Statistics Estonia noted. Still, the fall is much slower than the drop of over 50% the previous month, which owed to a decline in oil shale mining provoked by low global prices. Production in energy, meanwhile, increased growth, ballooning 34.7% on the year.
Growth in the manufacturing sector inched up 0.8%. Most segments recorded growth, with auto growing 25.5% while textiles grew 14.7%. Manufacture of machinery and equipment, on the other hand, fell 20%. About 70% of total output was sold on the external market, as has been the case for several months.
Despite stuttering industrial output, the European Commission forecasts Estonian growth at 1.9% in 2016. That is an upward revision from 1.6% predicted in February.