Nov 02, 2005. /Lesprom Network/. According to Statistics Finland, seasonally adjusted industrial output grew by 1.2% month-on-month (m/m) in September, following a 2.5% m/m contraction suffered in August. However, measured year-on-year (y/y), the seasonally adjusted volume of industrial production fell by 1.6%, putting the January-September contraction to 2.6% y/y. In August, the industrial sector had contracted by 4.0% y/y. Capacity utilisation rate in manufacturing registered 85% in September, which is 0.9% lower than in the corresponding month a year ago. In the pulp and paper industry, 94% of capacity was in use, while in the metal industry the utilisation rate remained at 88%. In the chemical industry and in other manufacturing, the utilisation rates posted 77% and 81%, respectively. Significance: The Finnish industrial sector has more or less recovered from the May-June pulp and paper sector shutdown. However, the sector's performance this year has disappointed as a whole, together with weak investment growth. Industrial output should somewhat strengthen in the coming months. Nevertheless, in our October interim forecast round, we lowered our expectation for Finnish industrial growth, now projecting the sector to contract by 0.2% this year. Looking forward, we expect industrial expansion to pick up, with growth accelerating to 4.3% for the whole of 2006. While significant rebound in growth is expected after this year will provide a low base-year level, next year's outlook is overshadowed by the strength of the oil prices that will continue boosting production costs.