Estonia Industrial Production Grew Most on Record in July Amid Export Gain

Estonian industrial production rose in July at the fastest annual pace in at least a decade as export demand continued to improve.

Production increased 24.6 percent from a year earlier, the most since records dating back to 2000, compared with a revised 21 percent advance the previous month, the Tallinn-based statistics office said on its website today. Output advanced 5 percent from the previous month on a seasonally adjusted basis.

Industrial output has improved following the biggest plunge in the 27-member European Union last year as demand from the Baltic nation’s key export partners, Finland and Sweden, grows. An export-led recovery will help Estonia’s economy expand 2 percent this year and 3.6 percent in 2011, the Finance Ministry forecast earlier this month.

Export sales of manufacturing, led by wireless network gear and wind generators made by local units of Sweden’s Ericsson AB and Zurich-based ABB Ltd., rose 38 percent from a year earlier, compared with a 42 percent increase in June. Domestic sales remained unchanged, compared with a 6 percent decline the previous month.

“After the initial bounce, we expect to see a moderation in the growth rate back to more sustainable levels,” Nordea Bank AB said in a note before the report.

A possible slowdown in demand from Estonia’s key Nordic trade partners remains a key risk for the Baltic country, which is due to adopt the euro in January, Finance Minister Jurgen Ligi said last week.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

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