Consumer price index increased in May

According to Statistics Estonia, the percentage change of the consumer price index in May 2008 compared to May 2007 was 11.3%.

This year the change of the consumer price index has remained around 11% compared to the corresponding month of the previous year, being the lowest in March (10.9%) and the highest in April (11.4%).

In May 2008 compared to May of the previous year, the prices of goods changed by 10.4%, of which the prices of food by 16.2% and the prices of manufactured goods by 5.9%. The prices of services increased 12.9% during the year. Regulated prices of goods and services changed by 20.5% and non-regulated prices by 8.7%. The index was mainly influenced by the price increase of food, by the increase in the expenditures on housing, as well as by the increase in the prices of motor fuel. As before, dairy-, cereal- and meat products gave more than two thirds of the price increase of food. The increase in the expenditures on housing was mainly influenced by the increase in the prices of heat energy.

On average, the prices of goods and services in May were 0.6% higher than in April.

The consumer price index was mainly influenced by the increase in the prices of motor fuel and food, of which fresh vegetables and cereal- and meat products gave more than a half.

Change of the consumer price index by commodity groups, May 2008

Commodity group May 2007 –
May 2008, %
April 2008 –
May 2008, %
TOTAL 11.3 0.6
Food and non-alcoholic beverages 18.9 0.9
Alcoholic beverages and tobacco 8.2 0.0
Clothing and footwear 4.3 -0.1
Housing 17.0 0.3
Household goods 3.8 0.1
Health 7.7 0.7
Transport 12.6 1.6
Communications -0.8 -0.1
Recreation and culture 2.4 0.0
Education 8.5 0.0
Hotels, cafés and restaurants 14.2 1.1
Miscellaneous goods and services 10.2 0.5
Source: Statistics Estonia

Profitability of enterprises decreased

According to Statistics Estonia, in the 1st quarter of 2008 compared to the same quarter of the previous year, the profitability of enterprises decreased 11%.

In the 1st quarter of 2008, enterprises’ total profit was 10 billion kroons. Compared with the same period of the previous year, the insufficient demand, increase in prices and in the expenditure on labour force which influenced the growth of costs brought along a noticeable decrease in profitability in the 1st quarter of 2008. The profit in energy, hotels and restaurants, real estate, health and trade activities decreased the most. Agriculture and mining and quarrying were in loss.

Total profit of enterprises, 1st quarter 2003 – 1st quarter 2008

The net sales of enterprises totalled 154.5 billion kroons in the 1st quarter of 2008. The growth in net sales of enterprises slowed down. In the 1st quarter of 2007, the annual growth in net sales was 26%, but in the 1st quarter of 2008 only 6%. Retail and wholesale trade and manufacturing enterprises accounted for the biggest share in net sales, respectively 41% and 21% of the total volume. Retail and wholesale trade, characterised by the biggest share and directly dependent on the price sensitivity of consumers, first and foremost influenced the slowdown in the growth of net sales. In retail and wholesale trade the growth was only slightly over 3% compared to the same quarter of the previous year. Net sales rose most in other community, social and personal service activities, hotels and restaurants, education, health and social work and mining and quarrying activities. As a rule, the growth in costs exceeded the growth in revenues in these activities.

In enterprises, labour productivity or net sales per person employed rose 3% compared to the same period of the previous year. At the same time, labour costs per person employed in an enterprise rose nearly 20% compared to the same period of the previous year.

In the 1st quarter, enterprises invested 9.5 billion kroons or nearly 9% more than in the same quarter of the previous year in tangible fixed assets. Investments were made mainly in construction, alteration of buildings and structures and in the acquisition of machinery, equipment and inventory. Investments in computers systems grew the most — 76%. At the same time, investments in the acquisition of land decreased 57%, caused mainly by the depression in the real estate market.

As before, the largest investors were real estate, renting and business and trade enterprises who made about a half of the total investments of enterprises.

Source: Statistics Estonia