Export prices in Estonia's industrial sector are growing faster than the prices of imported goods, and the sector's growth outlook remains strong, Swedbank chief economist Tõnu Mertsina said on Thursday.
"Even though, across fields of activity, the behavior of export prices differs quite a lot, companies of that sector can ask ever higher prices on average on foreign markets as a result of high demand," Mertsina said in a press release.
"In November, export prices in the manufacturing sector grew six percent on year," he noted. "The increase in import prices is slower than the increase in export prices — in November it was four percent. Hence trade conditions are favorable for Estonian companies, which is conducive to the improvement of their financial situation."
Along with the increase in export prices, rapid growth, faster than any seen in the past six years, is taking place in global trade volumes.
"Increases in the output volumes of the manufacturing sector and in the activity of the service sector lie behind the robust growth," Mertsina explained. "Manufacturing sector companies' orders and employment are growing, yet manufacturing capacities are increasingly falling behind orders. The rapid increase in output volumes at the end of last year indicates a continuation of robust demand at least at the beginning of this year."
On the back of strong international demand, Estonian industrial companies will boost their output volumes in the future as well, he added.
"Industrial companies are increasingly optimistic regarding new orders and increases in output volumes in the coming few months," said the Swedbank economist. "Although the peak of economic growth apparently remained in last year, strong demand can be expected to continue this year as well, which enables industrial companies to increase their output volumes and turnovers both on external markets and at home."
The output of Estonia's industrial enterprises in November was up three percent on year in November 2016, Statistics Estonia announced on Thursday morning. Output increased in mining and quarrying as well as in manufacturing, but decreased in the energy sector.
Editor: Aili Vahtla