Estonians earn 4.82 euros per hour

According to Statistics Estonia, in the 3rd quarter of 2011, the average monthly gross wages and salaries were 809 euros and the average hourly gross wages and salaries were 4.82 euros. Compared to the 3rd quarter of the previous year, the average monthly gross wages and salaries grew 6.6% and the average hourly gross wages and salaries by 4.7%.

 

The real wages which took into account the influence of the change in the consumer price index and which shows the purchasing power of wages and salaries, increased 1.2% in the 3rd quarter of 2011. Compared to the same quarter of the previous year, the real wages increased after the decrease lasting for eleven quarters.According to the Wages and Salaries Statistics Survey, the number of employees increased by 2.5% as at the end of September compared to the same period of 2010.

Compared to the 3rd quarter of 2010, the average monthly gross wages and salaries increased the most in mining and quarrying (13.4%), and decreased only in other service activities (10.2%).

Compared to the 3rd quarter of 2010, the average hourly gross wages and salaries increased the most in real estate activities (12.2%), and decreased the most in other service activities (11.4%).

The average gross wages and salaries were 785 euros in July, 817 euros in August and 826 euros in September.

In the 3rd quarter of 2011, the employer’s average monthly labour costs per employee were 1,096 euros and the average hourly labour costs were 7.64 euros. Compared to the 3rd quarter of 2010, the average monthly labour costs per employee increased by 6.7% and the average hourly labour costs by 4.1%.

Compared to the 3rd quarter of 2010, the average monthly labour costs per employee increased the most in wholesale and retail trade (12.8%) and decreased only in other service activities (10.6%).

Compared to the 3rd quarter of 2010, the average hourly labour costs increased the most in real estate activities (12.1%) and decreased the most in other service activities (9.3).

Statistics Estonia conducts the survey of wages and salaries statistics on the basis of international methodology since 1992. In 2011, the sample includes 11,277 enterprises, institutions and organisations. The average monthly gross wages and salaries have been given in full time units to enable a comparison of different wages and salaries, irrespective of the length of working time. Calculations of the monthly gross wages and salaries are based on payments for actually worked time and remuneration for time not worked. The hourly gross wages and salaries do not include remuneration for time not worked (holiday leave pay, benefits, etc.). In short term statistics, the average gross wages and salaries are measured as a component of labour costs. Labour costs include gross wages and salaries, employer’s contributions and employer’s imputed social contributions to employees.

The low wages (salaries) of employees of education in the 3rd quarter was related to reflecting the holiday leave pay of most employees in the 2nd quarter.

Average monthly gross wages and salaries, 1st quarter 2007 – 3rd quarter 2011 (euros)
  Year 1st quarter 2nd quarter 3rd quarter 4th quarter
2007 724 660 738 697 784
2008 825 788 850 800 838
2009 784 776 813 752 783
2010 792 758 822 759 814
2011   792 857 809  

Average monthly gross wages and salaries and monthly labour costs per employee, 3rd quarter 2011

Diagram: Average monthly gross wages and salaries and monthly labour costs per employee1

Average hourly gross wages and salaries and hourly labour costs, 3rd quarter 2011

Diagram: Average hourly gross wages and salaries and hourly labour costs

Source: Statistics Estonia

96 pct households prefer Internet payments

According to TNS Emor, which has been mapping the financial behaviour of Estonia’s households, the role of cash in payment habits and income receipts has remarkably declined.

According to the survey conducted in September, 59% of the respondents prefer to pay by card for their daily purchases (in 2009, the share was just 44%). About a tenth of households uses either only cash or only a bank card to pay for their daily purchases.

“The share of residents using secure and convenient payment means is on the rise. It is likely that the adoption of the euro has also affected payment habits,” said Mihkel Nõmmela, Head of the Payment and Settlement Systems Department of Eesti Pank.

The survey also revealed that the use of Internet payments has soared across all household groups over the past year. The share of households making regular Internet payments has risen from 91% in 2009 to 96% this year. Non-bank channels are still used by every fourth household and their share is declining.

According to Nõmmela, the next big step in the field of payments is full implementation of the Single Euro Payments Area (SEPA). “The Estonian people often feel the different level of banking services in Europe, when it is impossible to pay by card, a bank transfer takes a lot of time, or when they are unable to purchase something from a European e-store. SEPA improves communication between payment systems and makes payments faster and more efficient,” he said.

According to the survey, six out of a hundred employees receive their income in cash, whereas lower-paid people are more often paid in cash than others. When making purchases, pensioners and lower-paid people tend to use cash instead of bank cards, but the share of pensioners paying by card is increasing.

13% of the respondents have bought goods or services from foreign e-stores over the past year. TNS Emor is of the opinion that this number will go up, since 21% of the respondents said they were going to purchase from foreign traders the following year. The TNS Emor survey included 981 households, with people aged 18-74 questioned. The survey was commissioned by Eesti Pank.

TNS Emor has been conducting the F-monitoring survey since 1998. The aim of the survey is to map changes in the Estonian residents’ use of money and financial-behaviour possibilities and desires.

Source: Bank of Estonia

The Estonian credit market

The deteriorating external environment has not yet significantly affected the Estonian credit market. The volume of long-term loans and leases issued to companies in October was only a few per cent smaller than in September, totalling 145 million euros. Year-on-year, new lending has increased 36 per cent. However, the slowdown in growth in Europe may soon start reflecting in the revenue and investment of Estonian companies, and thus also lending growth may moderate in the future.

The volume of new housing loans grew by a third in October from a year ago. The number of loan contracts, on the other hand, increased only 6 per cent, which means that the average loan amount has risen. This is in line with this year’s developments in the real estate market, where the transaction activity is low with focus being on relatively more expensive residential premises.

The sale of car leasing, which almost doubled in the spring of 2011, has remained stable in autumn. Even though annual growth in car leasing has slowed considerably in the past few months, it was still strong at 52 per cent in October due to last year’s low comparison base.

The loan portfolio of banks has been contracting at a slower rate. The volume of new lending was smaller than the repayments of loans issued earlier, and so the loan portfolio kept shrinking in October. At the end of the month, the stock of loans and leases granted to Estonian companies and households was 14.5 billion euros; that is 4.9 per cent lower than it was a year ago.

The average interest rate on housing loans issued in October did not change from 3.4 per cent. The average interest rate on long-term corporate loans, which tends to fluctuate from month to month, dropped to this year’s average level of 4.3 per cent.

The share of overdue loans in the loan portfolio shrank to 5.7 per cent. The level of loans overdue for more than 60 days decreased by 31 million euros in October. Two thirds of that decrease arose from the improving loan portfolio of companies.

Annual growth in household deposits picked up to 14 per cent. The total deposits of Estonian companies and households totalled 7.8 billion euros at the end of October, up 7.1 per cent from a year ago. Month-on-month, the total of deposits grew by 74 million euros, with both companies and households relatively equally contributing to growth.

Author: Jana Kask, Head of the Financial Sector Policy Division of Eesti Pank

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