Estonia: Industrial activity contracts at sharper pace in December
Industrial output decreased 7.3% year on year in seasonally and calendar adjusted terms in December, which was a deterioration from November’s 5.8% decrease. Looking at the details of the release, manufacturing production dropped at a softer pace in December, while the decline in mining and quarrying output worsened.
On a seasonally adjusted monthly basis, industrial production rose at a faster rate of 5.3% in December (November: +2.7% mom), the best result since January 2021. Meanwhile, the trend improved significantly, with the annual average variation of industrial production coming in at minus 10.9%, up from November’s minus 11.5%.
Analysts at the EIU commented on the outlook:
“We expect that industrial production growth will turn positive in the second half of 2024, owing to easing producer prices, favourable statistical base effects and manufacturers increasingly adapting to increased trade frictions with Russia. […] Downside risks remain. An unexpected escalation of the conflict in Gaza would have the ability to push up global energy prices, which would increase input costs for Estonian manufacturers once again.”