Acceleration in growth of salaries continued throughout 2006

Growth in salaries was influenced in 2006 by accelerated economic development primarily generated by ever more active real estate and building activity due to the inflow of debt finance. The success of fields of activity with increased revenue caused by high consumer demand also influenced the rise in salaries.The average gross monthly salary in the last quarter of 2006 was 10,212 kroons, 17.5 percent more than in the same period in 2005. Despite the relatively rapid rise in prices, real growth in gross salaries (i.e. salary growth) accelerated, with inflation discounted by the end of the year to 12.6 percent and real growth in net salaries to 13.7 percent. The average gross salary for the year as a whole was 9351 kroons, with real growth in gross salaries of 11.3 percent and real growth in net salaries of 12.3 percent.
 
The fields of activity that continued to most strongly influence growth in gross salaries throughout 2006 were building, commerce and the processing industry, where salary growth reached on average 20 percent. A total of 44 percent of those employed in the country work in these three areas. The rapid growth of the building sector in turn affected the building material, metals and timber industries, where price rises and growth in income enabled salaries to be raised in order to retain workers. The same was experienced by commerce, where high consumer demand led to increased revenue and prices being reflected in the rapid growth of salaries.

Demand for labour in 2006 increased enormously within the country, while a number of member states of the European Union also opened up their markets. It is for this reason that a proportion of Estonia’s labour force has found work in Finland, the United Kingdom, Ireland, Sweden and other countries (including Norway). The ballpark figure for the number of Estonians working abroad is 20,000 or three percent of the working-age population in the country. Workers’ positions in salary negotiations improved markedly as a result of decreased unemployment and the opening of foreign labour markets, with job seekers demanding ever higher salaries.

The opening up of labour markets inevitably leads to harmonisation of salaries, and rapid growth here is expected to continue in 2007. That is why it is important to focus on making the organisation of work more effective and establishing contemporary technology in companies. Workers have become more aware and more demanding, and working conditions and other working environment-related factors are growing in importance alongside salary in people’s choice of workplace.

Source: Ministry of Finance

Euro will unlikely be introduced before 2011

Edgar Savisaar, the Minister of Economic Affairs and Communications, met the AS Tallink Grupp board today on the 15th of February and discussed the development plans for the Estonian transport and tourism sector and also for AS Tallink Group. Edgar Savisaar confirmed that he would support Tallink Group as the buyer of Silja Line, since it would bring direct benefit to the development of Estonia’s economy.

“Tallink Grupp is the region’s most influential international company that is based on Estonian capital,” said Edgar Savisaar, the Minister of Economic Affairs and Communications. “I personally consider it to be very important for Estonian companies to be successful in international competition and the Estonian state must do everything it can to support companies based on Estonian capital. It would certainly be beneficial for Estonia to see Tallink buying Silja Line – especially since Tallink is oriented towards creating a strong chain of values. New hotels and Tallink City will bring in numerous new tourists and thereby foster the growth of the Estonian tourism sector.”Edgar Savisaar said that today’s meeting raised many painful problems for Estonia that require solutions. “Estonian ships should sail under the Estonian flag,” explained Edgar Savisaar. “However, the current situation is such that sailing under the Estonian flag is more expensive to the shipping companies than sailing under, for example, the Latvian flag. In business, of course, companies choose the options with lower costs, but since the countries compete for taxes, Estonia must not treat the business concerns with ignorance. While the Latvian tourism sector is still significantly and up to three times smaller than its Estonian counterpart, it is growing much faster. The Estonian state must help its companies be as competitive as possible.”

Enn Pant, the chairman of the AS Tallink Grupp board, said that Tallink as a company with significant influence in Estonian economy would mostly need its country’s attitude to be reasonable and for the state to protect the company interests. “Tallink provides a significant part of Estonia’s GDP,” said Enn Pant. “In three years, Tallink will invest over 8 billion kroons. Tallink’s successful activities on the Baltic Sea have irritated the competitors, but we wish to consolidate our positions even further. I believe that Tallink is one of the few Estonian companies that has flown its national flag high both in Sweden and Finland – whereas it is usually the other way round and the Swedish and Finnish companies take a sizable portion of the profits created by companies in Estonia to Scandinavia. Tallink’s notation on the stock exchange has given thousands of Estonian citizens the chance to participate in international business.”
The objectives of the Ministry of Economic Affairs and Communications are to create overall conditions for the growth of the competitiveness of the Estonian economy and its balanced development through the drafting and implementation of the Estonian economic policy. The Ministry of Economic Affairs and Communications elaborates and implements the state’s economic policy and economic development plans in the following fields: industry, trade, energy, housing, construction, transport, traffic management, informatics and telecommunications, postal service and tourism. The Ministry also deals with the co-ordination of the state information system development, research and development and innovation, industrial property protection, competition surveillance, consumer protection, export promotion and trade safeguards, and the issues related to the regional entrepreneurship development and investments.

AS Tallink Grupp (www.tallink.ee) is one of the leading Baltic Sea shipping companies with the main field of activity in the transport of passengers and goods on the Estonia-Finland and Estonia-Sweden shipping lines. Tallink’s last fiscal year turnover was 4.1 billion kroons and the company provided services for over 3.2 million passengers during the year. AS Tallink Grupp has 12 ships and the company manages a hotel in downtown Tallinn.

Source: Ministry of Economic Affairs and Communications