Estonian production slows

TALLINN - Estonian industrial production growth slowed in August from a record pace the previous month as electronics and energy output decelerated, reports Nozare.lv. Production was 22.8 percent higher from a year earlier, compared with a revised 24.5 percent the previous month, which was the biggest on record since 2000, the Tallinn-based statistics office reported. Output was unchanged from the previous month on a seasonally adjusted basis.

Growth in external demand from Estonia’s key trade partners, Sweden and Finland, is slowing after a stronger-than- forecast recovery at the beginning of the year, the central bank said. An acceleration in annual gross domestic product growth to more than 5 percent in the second half of this year will be temporary, the bank added. Still, it forecast GDP growth to accelerate in 2011 to 4.2 percent, from an expected rate of 2.5 percent in 2010 due to improving domestic demand.

“Industrial production has experienced a very V-shaped recovery, and is now growing year-on-year at its briskest pace in the past ten years,” Nordea Bank said in a note. “After the initial bounce we expect to see a moderation in growth to more sustainable levels.”

Export sales of manufacturing, led by wireless network gear and wind generators made by local units of Sweden’s Ericsson and Zurich-based ABB Ltd., rose 41 percent from a year earlier, compared with a 38 percent increase in July. Still, manufacturing of computer and electronics products grew 121.5 percent, compared with a 341 percent gain in July. 
Domestic sales grew an annual 3 percent, compared with no change the previous month. Energy output grew an annual 41.5 percent, following a 51.5 percent jump in July.