BAKU, Azerbaijan, August 5. Estonia’s manufacturing sector is showing steady recovery in 2025, with production volumes gradually increasing across a wide range of industrial branches, and in June, output rose by 5.9 percent year-on-year—marking the fastest growth in the past three years, said Mario Lambing, Chief Analyst at the Ministry of Economic Affairs and Communications, Trend reports.
Lambing noted that the industry’s lowest point was recorded in July 2024, and since then, a moderate rebound has taken place. As of mid-2025, production volumes have returned to levels last seen in 2020.
While domestic sales have played a stronger role in recent months, export growth in June was relatively modest, with the export index rising by only 1.1 percent. However, exports still account for nearly two-thirds of the sector’s total revenue.
Among the Baltic States, Latvia led in industrial growth, with a seven percent increase in manufacturing volumes. Estonia followed, while Lithuania’s growth stood at just 2.2 percent. In the third quarter of 2025, Estonia’s capacity utilization rate reached 68.5 percent—the highest in two years, though still below the EU average.
The strongest year-on-year growth—more than doubling—was seen in the “other transport equipment” sector. While this is a relatively small segment in Estonia, it has shown rapid and consistent development in 2025. According to the Tax and Customs Board, revenue has risen sharply for shipbuilders, boat manufacturers, and drone producers.
Significant growth was also observed in beverage and furniture manufacturing, both increasing by about 20 percent—though the low base in 2024 partly explains the spike. Oil shale production has recently picked up again, but lower global oil prices kept revenue below last year’s levels.
The timber sector experienced a four percent uptick in
production metrics, with revenue streams escalating further due to
price inflation dynamics. The expansion was driven by a balanced
contribution from both the domestic and export sectors.
Concurrently, the alimentary sector has experienced a downturn in
the preceding months. In June, output experienced a contraction of
five percent, attributable to a decline in export volumes and
diminished consumer demand within the domestic marketplace. Dairy
output has experienced a decline relative to 2024, a period marked
by the introduction of enhanced production capacities; however, the
current volumes still surpass those recorded in preceding
years.
In alignment with the findings from a July assessment conducted by
the Estonian Institute of Economic Research, manufacturers
indicated a continuity in operational conditions akin to preceding
months and the prior fiscal year, with no significant short-term
fluctuations anticipated.
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