Estonia's manufacturing industry is undergoing a slowdown, with the production of wood continuing to slide.

That is the message from analysts talking to Baltic Business News, who say that wood production has fallen by more than a quarter year on year.

Amid a wider downturn of ten per cent across all of Estonia's manufacturing industries in the 12 months to March, commentators identified a difficult period for the region.

Hansabank's Maris Lauri said there were also signs of a slowing construction market, which in turn was impacting demand for wood products.

Mr Lauri cited the cost of labour and the movement of jobs away from Estonia as two key reasons, alluding to the problems that some major textile players, such as the Kreenholm company, have experienced of late.

He predicted that wood production might continue to fall as a result of the rising prices of raw materials as consumers tighten their belts.

Inflation has become an increasingly acute problem across the world in recent months, with the lack of liquidity heralded by the credit crunch making rising costs a bigger burden for consumers.

This news item is brought to you by KMS Baltics in conjunction with Fest-Forest and EST KINNISVARA. Baltic forestry and property specialists.