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Monday, September 1, 2008

Estonian Industrial Output Declines Again In July

According to the latest data from Statistics Estonia, Estonian industrial output was down by 5% in July compared to July 2007. The decrease in the industrial output was mainly the result of an ongoing decrease in electricity production — compared to July 2007 electricity output decreased by 29%. This decrease is the result of a partial replacement of own production by imported electricity — in July nearly one third of the electricity consumed was imported.

Manufacturing output was down a much smaller 0.3% on the year. The main reason for this was the decrease in orders, and most importantly on the internal market. According to the information of the Estonian Institute of Economic Research, more than half of enterprises mentioned insufficient demand as the key factor weakening production.

The decrease in the production of manufacturing was influenced by the production of food, wood and building materials. The decrease in the manufacturing of food is obviously affected by recent price increases and by the decrease in consumption resulting from them.

Since construction activity is weakening, the production of building materials is on a declining trend — the production of building materials decreased 27% compared to July 2007. The downward trend also continued in the manufacture of wood, and the production of plastic products.

In July compared to June, the seasonally adjusted industrial production of Estonia nudged up by 0.3%, largely due to a reasonably strong monthly increase in manufacturing.

Production was up in July in the export-oriented branches of industry — in the manufacture of metal products, chemical products, electrical machinery. Production grew in all branches of machinery and apparatus manufacturing, where the share of exports is 64% in the manufacture of machinery and 97% in the manufacture of radio apparatus.

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