Industrial Output Stuck at 2013 Levels
With external demand recovering very slowly, industrial output was sluggish in February, with enterprises producing only as much as they did one year ago.
As in January, industrial output was slowed by a drop in power generation - nearly 20 percent this month, Statistics Estonia said today.
Compared to February 2013, 18 percent less electricity and 12 percent less heat was produced, due to imports stepping in to fill the gap.
"The new Estlink2 cable launched in February does increase the transmission capacity between the countries, but it tends to lead to cheaper market-price Finnish electricity being imported to Estonia," said Tõnu Mertsina, chief economist for Swedbank, told uudised.err.ee
In contrast to the drop in the energy sector, output increased in manufacturing and mining - a 3 percent increase year on year.
Volumes in manufacturing may have grown, but sales revenue dropped 4 percent. That, said Mertsina, shows that companies have left stocks in warehouse due to low demand.
New orders from abroad in the manufacturing sector dropped 13 percent in February. New domestic orders also saw a big drop.
That will mean lower demand will persist in the months ahead, said Mertsina, who said that of Estonia's closest neighbors, only Sweden is expected to post strong economic growth this year.
With regard to more significant branches of industry, output increased in timber, food and electrical equipment production.
Output dropped in electronics and metallurgical fields.
A total of 71 percent of the export sector's output was exported, a drop of 4 percent compared to the same month last year. Domestic sales increased by 3 percent. The drop in the export figures stemmed from lower sales of electronics and sales in the oil shale, chemical and metal products sectors.
The month-on-month drop, seasonally adjusted, was 2 percent, and 1 percent in manufacturing sector.