Estonian industrial production growth picked up speed to 7.1% y/y in December, working-day adjusted data from Statistics Estonia showed on January 31.

The expansion is 4.4pp faster than the annual reading for November and puts growth of industrial output at the highest point since May, marking an end to the subdued growth figures that dominated in the second half of 2017. Overall, however, the positive streak in the sector has now lasted 16 consecutive months.

Estonian GDP grew just 1.6% in 2016, still improving on the six-year low of 1.1% the preceding year. The economy made a good start to 2017, with the first quarter GDP growing 4.4%, then surging to 5.7% y/y in April-June, and 4.2% y/y in the third quarter. The data for the fourth quarter will be released on February 28.

GDP expansion forecasts for 2017 range from 2.3% by the European Commission to more than 3.5%, according to Swedbank.

In unadjusted annual terms, industrial production grew 2% in December. In seasonally adjusted monthly terms, output expanded 2.5%. The full-year growth figure came in at 7.7%, compared to 2.3% in 2016.

The working-day adjusted annual production growth in December was driven by expansion in the manufacturing and mining segments, where output expanded 7% and 8.2% on an annual basis, respectively. Energy production fell 3.3% y/y.

Most manufacturing sub-segments increased output, with the exception of manufacture of electrical equipment and of furniture.

Around 67% of industrial output was sold on the external market, Statistics Estonia also reported. That has been nearly a constant ratio over several months now. According to unadjusted data, export sales of manufacturing production grew 5% y/y in December, while domestic sales rose 10% on the year.