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Saturday, December 8, 2007

Estonia Manufacturing Output October 2007

According to Statistics Estonia, Estonia's industrial output increased in October 2007 by a seasonally adjusted 1% compared to September and by 6% compared to October 2006. The increase in manufacturing was, however, lower, at 4% Y-o-Y. The principal detail about the numbers was the rapid growth in energy production and mining.

In October 2007, when compared with October 2006, the production of electricity increased by 28%, and the production of heat by 14%. The growth in the production of energy is partly the result of an increased demand for exports via Estlink’s submarine cable.

The underlying point is that growth in the manufacturing sector continued to be weak in October, although it did rebound somewhat from September, posting a 4.4% year on year growth. The industrial sector with the largest share - food production - increased output by 3%.

Compared to October 2006, the output growth was highest in the manufacture of precision instruments (39%). Output also increased in the manufacturing of chemicals, building materials and furniture, mainly due to increase in exports. In October the smallest growth was to be found in the manufacture of textiles, where there was an increase in sewn textile products, but the production of yarn and fabric continued to decline.

The downward trend in wood manufacture also continued, while the production of metal products decreased as well. The rise in the prices of raw materials now constitutes a serious problem in these sectors. The production of plastic products also decreased in October, the decline was mainly being influenced by the decline in production for export.

All in all, and little by little, we can see that the continuing increase in prices is having its corrosive effect on the manufacturing sector.

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