Ministry of Economic Affairs: Production growth seen in several Estonian goods sectors

TALLINN - While trade statistics for February showed an 8 percent decrease in the export of Estonian-produced goods, the Ministry of Economic Affairs and Communications (MKM) confirms that there are also sectors where production is growing.

For several consecutive months, the export of goods of Estonian origin has declined, but at the same time, the sale of goods from other countries, known as re-export, has strengthened. In February, re-exports grew by 11 percent, while the export of Estonian-origin goods decreased by 8 percent year-on-year. Overall, total goods exports were 1 percent below the level of the previous year.

The growth in re-exports was driven mainly by the same products as before: gold, coins, and other precious metals, with the increase supported primarily by rising prices. The brokerage of natural gas and electricity to Latvia and Finland, as well as telephone sales, also made a significant contribution.

"Although the export of goods of Estonian origin has decreased in some commodity groups, we are seeing signs of production growth in several areas and the potential for an export recovery in the coming months," noted Mario Lambing, chief analyst at the strategy department of the Ministry of Economic Affairs and Communications.

The decline in exports of Estonian-origin goods was largely due to a decrease in sales of mineral products, including shale oil and other oil products. At the same time, industrial statistics show that shale oil production this year has exceeded last year's levels. According to February data, this output may not have fully reached the export stage, so growth can be expected in the coming months, supported by higher prices.

Among the main product groups, wood products such as wood pellets, unprocessed timber, and plywood also saw a decline in February. However, the growth in wood pellet production suggests that part of the output was temporarily used for the domestic market. On a positive note, sales of prefabricated buildings continued to grow.

Machinery and equipment made the largest positive contribution to the export of Estonian-origin goods. Although exports of telecommunications equipment decreased, this was mainly due to a high base effect from the previous period concerning China. Meanwhile, sales to the main market, Sweden, grew. The export growth was supported by a wide range of products, including ticket machines, telephone parts, inverters, and cameras.

"Companies' expectations for developments in the coming months were quite positive in March. Supply disruptions related to the war in Iran and the rise in energy prices may have a delayed effect, and there is a great deal of uncertainty about the future," Lambing added.