Lenno Uusküla, Chief Economist at Luminor, one of the major banks in Estonia, told ETV news show "Aktuaalne kaamera" (AK): "One of Estonia's specialties has been in the production of investment and durable goods for export to Sweden."

"Everything relating to the construction sector: Factory buildings, construction structures and furniture, everything associated with real estate. This is what Sweden does not have at the moment. The prices are a bit has grown, but investments and transaction volumes have fallen dramatically," Uusküla went on.

While a glimmer of hope for industry seemed to appear at the end of last year, this evaporated again in January.

Karel Lember, analyst at the Ministry of Economic Affairs and Communications, told AK: "We had also expected that it would get better; the figures for December were already quite good, but January turned out to be weaker than expected."

"If we take a look at other indicators - for example: The level of utilization of production capacities in the first quarter of this year was the lowest in the EU. The industrial sector does have sine free resources, but it doesn't have the customers; demand is quite weak."

AK also spoke to the CEO of one affected company, Eesti Kraanavabrik, which makes cranes. CEO Rain Johanson said that as customers are mostly Estonian firms whose client base is mostly in the Scandinavian countries, this has impacted upon them.

"We have also had examples here in which an inquiry for a crane is made, but the investment is not, because their client has canceled an order, so the need for a crane has also gone," Johanson said.

This was particularly noticeable from last September onward, Johanson went on, adding that demand is about half the level it had been.

Manufacturing industrial output fell sharply in January in Estonia by 12 percent on year (industrial production overall fell by nearly 9 percent on year).

There may be hope for recovery in the second half of 2024, however, Uusküla said, in part because the Swedish real estate sector has bottomed out, in other words there can't be further contraction.

From fall, or even spring 2025, Rain Johanson said, there maybe a growth in new orders.

In the meantime the tech and electronics sectors have continued to grow, and this will make its effects known in due course, Lenno Uusküla said.

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