Production bounces back

  • 2011-02-02
  • From wire reports

TALLINN - In 2010, the production output of Estonia’s industrial companies rose by 23 percent, in comparison to the previous year, show data at Statistics Estonia, reports news agency LETA. The growth of production was mainly influenced by external demand, but domestic demand also increased continually during the year.

Last year was the year of recovery from the economic crisis in Estonia as well as in the European Union as a whole. In April 2009, industrial production in the EU decreased to the lowest level of the crisis, declining by a fifth compared to the same month of 2008. At the same time, the decline of production in Estonia exceeded 30 percent, and remained at such a level till July 2009. The declining trend was abruptly replaced with growth at the beginning of 2010. If Estonia was the country with the largest decrease in manufacturing production among EU member states in the middle of 2009, then in the 2nd quarter of 2010, Estonia became the country with the most rapid growth in production.

When in 2009 as a whole, compared to the previous year, production decreased in all branches of manufacturing, then in 2010 production exceeded the volume of the previous year in most branches. The growth in manufacturing output was most influenced by the branches holding bigger shares of GDP – in manufacturing of electronic products where production increased by nearly two times, and manufacturing of wood products where the production grew by more than a quarter.

With respect to the branches of manufacturing holding a smaller share of GDP, production increased considerably in the manufacture of motor vehicles, machinery and equipment, metals, paper, pharmaceutical and plastic products, mainly due to an increase in exports. More than two-thirds of all production of manufacturing activity was sold on the external market. Export sales of manufacturing output grew 41 percent, compared to 2009. The demand on the domestic market was significantly lower – in 2010 domestic sales did not change compared to the previous year. The rapid growth in production was also partly influenced by the low reference base in 2009.

In December 2010, production output by industry increased 39 percent compared to December of the previous year; manufacturing output grew 41 percent.
In December 2010 compared to the previous month, seasonally adjusted industrial production rose 1 percent; manufacturing output grew 2 percent during the month.
In December last year, compared to December 2009, production of electricity increased 70 percent and the production of heat 8 percent. The increase in energy production was mainly caused by growing demand for energy, induced by more active manufacturing as well as by the growth in the export of electricity.