7,600 job vacancies in 2Q

According to Statistics Estonia, there were 7,600 job vacancies in the enterprises, institutions and organisations of Estonia in the 2th quarter of 2014. The number of job vacancies increased by 6.3% compared to the previous quarter and by 0.4% compared to the 2nd quarter of 2013.

The rate of job vacancies, i.e. the share of job vacancies in the total number of jobs has remained stable in recent years, in the 2nd quarter of this year it was 1.4%. The rate of job vacancies was the highest in accommodation and food service activities and in administrative and support service activities (both 2.9%) and the lowest in real estate activities (0.1%).

The increase in the number of job vacancies was the biggest in construction and in agriculture, forestry and fishing activities. Compared to the 2nd quarter of 2013, there were 73% more vacancies in construction and 58% more vacancies in agriculture, forestry and fishing. This could be influenced by the lack of qualified labour, the seasonality of work, the wage level of the occupation.

In the territorial distribution of job vacancies and occupied posts no changes have taken place, the number of posts was still the highest in Harju county (incl. Tallinn). The rate of job vacancies was the highest in Harju and Pärnu counties (1.7% and 1.6%, respectively) and the lowest in Hiiu county (0.1%).

Out of the 7,600 vacancies of the 2nd quarter, 6,000 were in the private sector and the rest in the public sector. The rate of job vacancies was 1.1% in the public sector and 1.5% in the private sector. The public sector also includes companies owned by the state or the local government.

The movement of labour is characterised by labour turnover – in the 1st quarter of 2014, a total of 60,000 employees were hired or left their jobs. The labour turnover increased by 5.5% compared to the 1st quarter of 2013.

Diagram: The number of job vacancies and occupied posts

A job vacancy is a paid post that is newly created, unoccupied or becomes vacant when an employee leaves, and for which the employer is actively trying to find a suitable candidate from outside the enterprise, institution or organisation concerned.

The rate of job vacancies is the share of job vacancies in the total number of jobs (sum of occupied posts and vacancies).

The data are based on the job vacancies and labour turnover survey conducted by Statistics Estonia since 2005. In 2014, the sample included 12,267 enterprises, institutions and organisations.

Source: Statistics Estonia

Fazer to close Tallinn plant, lay off 95

Finnish food group Fazer announced yesterday it will close its plant in Tallinn in April, laying off 95 workers, reported Äripäev.

Fazer said the move is part of its strategy to consolidate its Baltic manufacturing operations to Latvia and Lithuania.

Read more from BBN

Wage growth slowed in the second quarter

Data from Statistics Estonia show that the average gross monthly wage was up 4.8% in the second quarter of 2014, and the gross hourly wage by 8.8%. The sizeable difference between the growth rates of monthly and hourly wages indicates that less was paid in bonuses and benefits, which can be seen as the flexible part of wages. Quarterly growth in average wages continued to slow in seasonally adjusted terms, reflecting an adjustment to the weak economic environment and productivity.

Average wage growth was also slowed by increased declaration of wages in sectors where wages are below average, such as catering and accommodation services, and agriculture, where Statistics Estonia reports that employment was more than 10% higher than last year. The effect of employers anticipating the upcoming registration of employees could already be felt in the second quarter.

Wage growth has also slowed in sectors that are exposed to risks from the external environment. Average wages in manufacturing rose by 4.9%, and those in transportation and storage by 2.4%. Exporting companies are less able to increase their labour costs than companies serving domestic demand are, as external competition makes it harder for them to pass higher costs into product prices.

The impact of large collective wage agreements passing out of the comparison base and increased uncertainty will together mean that wage growth is more likely to slow in the near future. The Eesti Pank June forecast expects that if external demand recovers, wage growth in the coming years will be 6-7%. This is in line with Estonia’s potential for economic growth of 3-4%.

Source: Bank of Estonia

Author: Orsolya Soosaar, Economist at Eesti Pank

Average monthly gross wages exceeded 1,000 euros

According to Statistics Estonia, in the 2nd quarter of 2014, the average monthly gross wages and salaries were 1,023 euros and increased 4.8% compared to the 2nd quarter of the previous year.

Compared to the same quarter of the previous year, the increase in average monthly gross wages and salaries in the 2nd quarter of 2014 was slower than in the 1st quarter. The average monthly gross wages and salaries without irregular bonuses and premiums increased 5.0% in the 2nd quarter. Compared to the 2nd quarter of 2013, irregular bonuses and premiums decreased 1.8% per employee and reduced the rise in average monthly gross wages by 0.2 percentage points.

Real wages, which take into account the influence of the change in the consumer price index, also increased 4.8% in the 2nd quarter of 2014. Compared to the same quarter of the previous year, real wages increased for the twelfth quarter in succession.

According to the Wages and Salaries Statistics Survey, the number of employees as at the end of June was 4.7% higher than at the same time in 2013. There was a slightly more than a 10% increase in the number of employees in four economic activities: 1) agriculture, forestry and fishing; 2) wholesale and retail trade; 3) accommodation and food service activities; and 4) administrative and support service activities.

In the 2nd quarter of 2014, the average hourly gross wages and salaries were 6.21 euros and increased 8.8% compared to the 2nd quarter of 2013.

In the 2nd quarter of 2014 compared to the 2nd quarter of 2013, the average monthly and hourly gross wages and salaries increased the most in financial and insurance activities (by 9.3% and 12.2%, respectively).

Compared to the 2nd quarter of 2013, the average monthly and hourly gross wages and salaries increased the least in mining and quarrying (by 0.4% and 4.8%, respectively).

The average gross wages and salaries were 996 euros in April, 1,002 euros in May and 1,065 euros in June.

In the 2nd quarter of 2014, the employer’s average monthly labour costs per employee were 1,379 euros and the average hourly labour costs were 9.29 euros. Compared to the 2nd quarter of 2013, the average monthly labour costs per employee increased by 4.5% and the average hourly labour costs by 7.3%

Compared to the 2nd quarter of 2013, the average monthly labour costs per employee increased the most in electricity, gas, steam and air conditioning supply (8.9%) and the average hourly labour costs increased the most in financial and insurance activities (11.2%)

Compared to the 2nd quarter of 2013, the average monthly labour costs per employee decreased only in mining and quarrying (0.8%) and the average hourly labour costs increased the least in information and communication (3.0%).

Statistics Estonia conducts the Wages and Salaries Statistics Survey on the basis of an international methodology since 1992. In 2014 the sample includes 11,920 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

Average monthly gross wages and salaries, 1st quarter 2010 – 2nd quarter 2014 (euros)
Year 1st quarter 2nd quarter 3rd quarter 4th quarter
2010 792 758 822 759 814
2011 839 792 857 809 865
2012 887 847 900 855 916
2013 949 900 976 930 986
2014 966 1 023

Average monthly gross wages and salaries and monthly labour costs per employee,
2nd quarter 2014

Diagram: Average monthly gross wages and salaries and monthly labour costs per employee, 2nd quarter 2014

Average hourly gross wages and salaries and hourly labour costs, 2nd quarter 2014

Diagram: Average hourly gross wages and salaries and hourly labour costs, 2nd quarter 2014

 

Read more from Statistics Estonia

Wage growth decelerates in the 2Q

Monthly wage growth decelerated for the third quarter in a row. In the 2Q monthly wages increased by 4.8% YoY in nominal terms (7.3% in 1Q) and reached above 1000 euros for the first time (1023 EUR). Real wages, which previously accelerated seven quarters in a row, decelerated to 4.8% as well. Deceleration of wage growth was expected.

Monthly wage growth decelerated in most economic activities, except energy, finance, real estate, accommodation and food services and administrative and support service activities. At the same time, the growth of average hourly gross wages accelerated to 8.8%. The impact from the remuneration to employees for the time not worked, which is one component to explain the difference between monthly and hourly wages, was relatively small in 2Q. The reason comes from the increased share of employees with lower salaries compared to a year ago. The employment increased faster in the activities with lower wages than average, e.g. agriculture and forestry, domestic trade, accommodation and food services and administrative and support service activities. Although the number of employees has increased, hours worked per employee has diminished.

Wage growth responds to the change of economic growth with a certain delay. On the one hand, shortage of labour force and decreased unemployment press wages upwards, on the other hand the share of labour costs in enterprises’ turnover has increased and profitability decreased. Although, the number of employees increased in 2Q, total wage and labour cost has decreased. Deceleration of the wage growth refers to the better adjustment of enterprises and labour market to the weaker economic growth. Swedbank industrial survey published this spring indicated that enterprises planned less growth of wages this year.

According to our recent forecast (Swedbank Economic Outlook), nominal wage growth decelerates to around 6% this and the next year (7.8% in 2013). However, escalation and protraction of the geopolitical tensions can worsen economic sentiment and decelerate wage growth even further. Although nominal wage growth decelerates this year, real wage growth accelerates as inflation rate is low. Growth of real wages will slow down together with the inflation picking up next year.

Source: Swedbank

Every fifth child has a parent working abroad

According to one batch of data from an international children’s well-being survey conducted from January to June, 22 percent of Estonian sixth-grade students said one or both of their parents worked abroad.

University of Tartu researcher Kairi Talves, who analyzed the data, told Eesti Päevaleht daily that the children viewed their long-term plans and coping more negatively, and that their general well-being was also lower.

Of the 230 children (1,000 were sampled) most said one parent worked abroad. In the case of 189 children, it was the father. In the case of 13, both parents worked abroad, and most of these were raised by their grandparents.

The study of children’s well-being in Estonia is part of an international project in 13 countries, funded by the Jacobs Foundation in Switzerland.

Source: ERR News

20 pct cut in unemployment insurance premium proposed

The Unemployment Insurance Fund board has approached the Cabinet with a proposal to lower the unemployment insurance premium from 3 percent to 2.4 percent.

Currently employees pay 2 percent and employers 1 percent. Under the new proposal, the split would be 1.6 percent and 0.8 percent.

The fund’s board, which is currently chaired by the head of the country’s unions, Peep Peterson, said Monday’s offer was a compromise.

“The new premium rate would allow us to cover the needs of the work ability reform and to continue amassing reserves at a reasonable rate,” said Peterson, as reported by uudised.err.ee. “The board reviewed the potential crisis scenarios before making the decisions and we can be sure that we can get by with the with the insurance resources we have even in complicated times.”

Read more from ERR News

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