Decrease in retail sales slowed down

According to Statistics Estonia, in May 2010 compared to May of the previous year, the retail sales of goods of retail trade enterprises decreased 5% at constant prices.

In January the retail sales of goods decreased 12% compared to the same month a year ago, in February 11% and in March and April 9%.

In May, the retail sales of goods of retail trade enterprises were 4.7 billion kroons. The retail sales of goods were most influenced by the stores selling manufactured goods, where the decrease slowed down significantly. Compared to May 2009, the retail sales of stores selling manufactured goods decreased 6%. At the beginning of the year, the decrease was still 17%. The decrease in retail sales slowed down in most economic activities if compared to the same month of the previous year. Compared to May of the previous year, the retail sales of goods increased in four economic activities: the retail sales of food, beverages and tobacco in specialized stores, the retail sales of second-hand goods in stores, the retail sales in stores selling textiles, clothing, footwear and leather goods and in stores selling pharmaceutical goods and cosmetics. The very low reference base in 2009 contributed to the sales growth of the retail sales of foods, beverages and tobacco in specialized stores. At the same time the sales increase in these stores does not significantly influence the retail sales of goods of retail trade enterprises, because the share of this economic activity is very small — 3% in May 2010.

The decrease in grocery stores which slightly accelerated in April slowed down again in May. In January and February the retail sales of these stores decreased 6% compared to the same month of the previous year, in March 4% and in April again 6%. In May the retail sales in grocery stores decreased 3% compared to May of the previous year.

Compared to the previous month, the retail sales in retail trade enterprises increased by 7% at constant prices. According to the seasonally and working-day adjusted data the retail sales increased by 1%. In grocery stores the retail sales of goods stayed at the same level compared to the previous month, in stores selling manufactured goods the retail sales increased 2%.

In May the revenues from sales of retail trade enterprises were 5.8 billion kroons, out of which retail sales of goods accounted for 81%. Compared to May of the previous year, the revenues from sale increased by 3% at current prices. Compared to the previous month, this indicator increased 8%.

Retail sales volume index of retail trade enterprises and its trend,
January 2002 – May 2010 (2005 = 100)

Source: Statistics Estonia

Recession did not influence poverty

According to Statistics Estonia, in 2008 the growth of wages and salaries slowed down but the increased pensions and governmental benefits helped to maintain incomes. Therefore the relative poverty remained on the level of 2007.

In 2008, 19.7% of the Estonian population lived in relative poverty, which is approximately as much as in 2007 when the rate was 19.5%. Social transfers (governmental benefits and pensions) helped to maintain incomes, as they were not included in income the relative poverty rate was even 37.5% in 2008, (in 2007 — 36.3%)

In 2008, a person was considered to be in at-risk-of-poverty if his/her monthly equalised disposable income was below 4,858 kroons. The at-risk-of-poverty threshold rose by 518 kroons compared to the previous year. Also in 2008 the difference in income between the poorest and richest fifth of the population stayed fivefold.

The elderly is rather the age group that still lives in poverty. In 2008, every third person aged 65 and older and 14% of persons aged 25–49 lived in relative poverty. Compared to previous years it can be noticed that the number of younger people living in relative poverty is increasing, and the number of persons aged 65 and older living in poverty is decreasing.  The main reason is more stable income of persons in pension age compared with other age groups.

By type of household the at-risk-of-poverty rate has increased the most during the year 7 percentage points in households with three and more children, and has decreased 8 percentage points in households with a single person aged 65 and over. In other households there were not so large variations in the at-risk-of-poverty rate.

Falling into the risk-of-poverty is related to the education level. In 2008, the at-risk-of-poverty rate of persons with basic or lower education (below upper secondary education) was 34%, which was more than four times higher than of persons with higher education (tertiary education) (8%).In recent years the trend shows that the relative poverty rate of less educated persons is increasing, while that of the persons with higher education is decreasing. Thus, a good education is an important presumption for the prevention of poverty.

The estimations are based on the social survey, which has been conducted by Statistics Estonia since 2004. In 2009, over 4,900 households participated in the survey. The survey collects data about yearly income, which is the reason why the survey of 2009 asks for data about income in 2008. The yearly income is necessary for calculating the indicators of poverty and inequality. Social surveys are conducted on the basis of harmonised methodology in all the European Union countries under the title of EU-SILC.

At-risk-of-poverty rate is the share of persons with an equalised yearly disposable income lower than the at-risk-of-poverty threshold. At-risk-of-poverty threshold is 60% of the median equalised yearly disposable income of household members. Equalised disposable income is the total household income, which is divided by the sum of equivalence scales of all household members.

Below upper secondary education — basic or lower educationUpper secondary education — professional secondary education after basic education, vocational education together with upper secondary education, professional secondary education after basic education, general secondary education or professional secondary education after secondary education.

Tertiary education — professional secondary education after secondary education, professional higher education, applied higher education, professional higher education, diploma study, bachelor’s, master’s or doctoral degree.

See a table At-risk-of-poverty rate of people aged 18 or over by educational level, 2005–2008

Source: Statistics Estonia

Exports grew on account of fuels

According to Statistics Estonia, in April 2010 exports of goods grew by 37% and imports 18% compared to April of the previous year. Exports increased in the dispatches of all commodity sections, especially fuels.

In April exports of goods from Estonia amounted to 10.6 billion kroons and imports to Estonia 11 billion kroons. Exports increased by 2.9 billion kroons and imports 1.7 billion kroons compared to April 2009. The trade deficit amounted to 0.4 billion kroons, which was over four times more than in April of the previous year.

In April, the biggest share in Estonia’s total exports was held by the commodities of machinery and equipment (nearly a fifth of Estonia’s total exports) and mineral products (15%). Compared to April of the previous year, the biggest increase was in exports of mineral products (incl. motor spirits, fuel oils and electrical energy) — 0.9 billion kroons. The turnover in exports of metals and products thereof increased by 60% or 0.4 billion kroons.

In April the biggest share in imports was also held by machinery and equipment (20% of Estonia’s total imports) and mineral products (16%). In April the turnover of imports increased among all main commodity sections compared to April of the previous year. The biggest increase was announced in the arrivals of metals and products thereof and machinery and equipment (by 0.4 billion kroons both).

The main countries of destination were Finland (18% of Estonia’s total exports), Sweden (14%), Russia and Latvia.  Electrical machinery and equipment accounted for the biggest share of exports to Finland and Sweden, vehicles and accessories thereof to Latvia and paints and lacquers to Russia. Compared to April of the previous year, exports to Sweden and Finland increased the most (by 0.5 billion kroons both).

The main countries from where goods were imported to Estonia were Finland (16% of Estonia’s total imports), Latvia (13%) and Germany. Electrical machinery accounted for the biggest share of imports from Finland, fuels from Latvia and iron and steel from Germany.  The biggest increase was announced in imports from Finland, Latvia, Germany and Sweden (0.4 billion kroons from each). At the same period imports from Lithuania decreased by 0.4 billion kroons.

According to Eurostat data, exports of the European Union (EU 27) countries increased by 18% compared to April of the previous year.

In April compared to March, exports of Estonia increased by 8%, but imports to Estonia decreased by 12%.

Estonia’s foreign trade, January–April, 2009–2010

Month	Exports, mEEK			Imports, mEEK			Balance, mEEK
	2009	2010	Change, %	2009	2010	%	2009	2010
January	7 269	8 094	11	8 830	8 503	-4	-1 562	-409
February	7 817	9 785	25	8 755	9 599	10	-939	186
March	8 348	9 833	18	9 788	12 497	28	-1 440	-2 664
April	7 736	10 630	37	9 330	10 987	18	-1 594	-357

 

Read more from Statistics Estonia

Window maker Glaskek is facing bankruptcy

Window maker Glaskek is facing bankruptcy now that its large creditor Swedbank, the largest bank in Estonia, has lost faith in the restructuring of the company and on June 22 filed the company for bankruptcy, writes aripaev.ee.

Lars Nilsson who heads Swedbank’s Baltic unit that manages high business risks said that Swedbank had been actively involved in looking for solutions with Glaskek since last autumn.

Nilsson said that the bank and Glaskek had been jointly analysing the possibilities to restructure the company, but after an in-depth study, the bank no longer sees a possibility to restructure Glaskek into a viable business by restructuring.

Read more from BBN

Minister proposed Baltic Sea internal market

During his meeting in Tallinn today with Finnish Foreign Minister Alexander Stubb, Foreign Minister Urmas Paet said that creating a Baltic Sea internal market would be in the interest of closer co-operation among the EU nations located along the shores of the Baltic Sea. “So that our ships, when going from one European Union port to another, would not have to go outside of the EU customs area. It would greatly simplify procedures and decrease bureaucracy,” he added.
Paet stated that the Strategy for the Baltic Sea Region created a good framework that now needs to be filled with substance. “The Strategy for the Baltic Sea Region allows the Baltic Sea region to be a laboratory for testing the functioning of a European Union internal market,” he stated.
Estonia also made a proposal to Finland to conclude a legal assistance agreement between the two countries. Paet said that the agreement would significantly simplify the management of everyday affairs for the large number of Estonian citizens living in Finland and Finns living in Estonia.
The Estonian and Finnish foreign ministers also addressed strengthening co-operation between the Nordic and Baltic countries. “For example, in areas such as consular aid, defence co-operation, sea monitoring, and development co-operation there is already a good basis for even closer co-operation,” said Paet.
Paet also thanked Stubb for Finland’s support for Estonia joining the euro zone. Energy co-operation was also addressed. Paet said that Estonia has fulfilled all the requirements for establishing the new Estonia-Finland electricity connection Estlink 2. “In order for Estlink 2 to be completed, this region must have a well-functioning electricity market, since in 2013 Estonia will be opening up its electricity market 100%. Uniform rules must be imposed regarding the import of electricity from third countries,” said Paet.

Source: Estonian Review

Expectations about transition to euro

A focus group survey conducted by the survey company Saar Poll was introduced in the Ministry of Finances today, on June 9; the goal of the survey was to map the attitudes, expectations and fears in selected target groups in relation to the transition to the euro. The survey was ordered by the Ministry of Finances and the State Chancellery, and was conducted in April and May of this year.

 

The survey by Saar Poll indicated that the residents of Estonia consider the euro to be a stable and sure currency and expect the transition to surely increase the competitiveness of Estonia and the trust of foreign investors towards Estonia. On a personal level, the residents see the larger benefits from the coming of the euro as more convenient travelling, less expenses from currency exchange, and the comparability of the local prices to the rest of the euro area.

 

The survey by Saar Poll proved that the activity plan of the state addresses the issues raised in the focus group survey. The survey also indicated that many small entrepreneurs have probably not yet started preparations for the transitioning to the euro because it is still a rather vague event for them.

 

“The purpose of our communication activities is to ensure that the necessary information about the transitioning to the euro reaches all entrepreneurs and that they start preparations in due time,” said Ingvar Bärenklau, Project Manager of Euro Communications. “This week we sent a mass e-mail to entrepreneurs, in order to notify them about the practical aspects of the transitioning to the euro and about the obligation to indicate parallel prices which will enter into force on July 1.”

 

The results of the survey also allow concluding that the Russian-speaking population of the Ida-Viru County has a doubting attitude towards the coming of the euro, but that the use of the euro is generally familiar to them. This means a need to inform the Russian-speaking population even more about the transition to the euro. It has already been taken into account in the euro communication plans.

 

But the survey also indicates that the pensioners of South Estonia would not currently want to replace the kroon with the euro, because they feel insecure in the face of changes. Bärenklau acknowledged that this is a relatively expected attitude, because seniors have traditionally been conservative in their attitudes towards all changes. At the same time it is clear that meetings with pensioners and comprehensive explaining of the transition will help to reduce the fears.
    
The target groups involved in the survey also expressed a concern about a possible increase of prices. According to Bärenklau, it is important to be aware that the coming of the euro in itself will not cause any price increases, because the transition will take place according to the current official exchange rate and all prices in kroons are required to be rounded to euros precisely on the basis of the valid exchange rate and the mathematical rule of rounding. As a measure for ensuring an undistorted price formation, all traders will be obliged to indicate their prices in sales outlets in parallel as kroon amounts and euro amounts, for six months before the transition to the euro, i.e. from July 1. The proper performance of this obligation will be inspected by the consumer Protection Board. Entrepreneurs will also enter into an Honest Price Formation Agreement in August, thus undertaking to refrain from using the transition to the euro for artificial price distortions.

 

The survey was conducted in the form of six focus group interviews; the target groups of the survey were small-scale entrepreneurs of Tallinn and Tartu, non-Estonians of the Ida-Viru County, pensioners from South Estonia, and residents of Tallinn having low income. In case of both small-scale entrepreneurs and people with low income, the Estonian-speaking and the Russian-speaking target groups were interviewed separately. See the results of the survey: Report of focus groups.

 

There is comprehensive information available about transitioning to the euro in Estonia at the Euroveeb website, which includes practical information about currency exchange procedures, price rounding, exchange rate and also about details of contracts and accountancy. There is also a free-of-charge Euroinformation telephone number 800 3330, which answers calls in both Estonian and Russian language.

Source: Ministry of Finance of Estonia

Salaries decreased for the first time in 16 years

According to Statistics Estonia, in 2009, the average monthly gross wages and salaries were 12,264 kroons and the hourly gross wages and salaries were 75.11 kroons. Compared to 2008, the average monthly gross wages and salaries were by 5.0% lower and the average hourly gross wages and salaries were by 3.1% lower. Since 1993 the average monthly gross wages and salaries decreased for the first time compared to the previous year.

In the previous year, during the last 16 years, real wages (which took into account the influence of the change in the consumer price index) decreased for the first time (by 4.9%).

In 2009 compared to the previous year, the average monthly gross wages and salaries increased only in electricity, gas, steam and air conditioning supply (7.0%) and decreased the most in construction (13.2%).

In 2009 compared to the previous year, the average hourly gross wages and salaries increased the most in electricity, gas, steam and air conditioning supply (7.8%) and decreased the most in construction (9.8%).

In 2009, the employer’s average monthly labour costs per employee were 16,697 kroons and the average hourly labour costs were 114.65 kroons. Compared to 2008, the average monthly labour costs per employee and the average hourly labour costs decreased 4.1% and 1.7%, respectively.

In 2009, the average monthly labour costs per employee increased only in two economic activities — in electricity, gas, steam and air conditioning supply (8.6%) and in information and communication (0.2%). The average monthly labour costs per employee decreased the most in construction (11.8%).

In 2009, the average hourly labour costs increased the most in electricity, gas, steam and air conditioning supply (9.0%) and decreased the most in construction (7.6%).

In 2009, the average monthly gross wages and salaries in the public sector were 12,914 kroons and in the private sector 12,013 kroons. Compared to 2008, the average monthly gross wages and salaries decreased both in the public and private sector by 4.0% and 5.6%, respectively. At the end of 2009 compared to the end of 2008, the number of employees in the private sector decreased 13.4% and in the public sector 3.5%. Public sector also includes companies owned by the state and local government.

Statistics Estonia conducts the survey of wages and salaries statistics on the basis of international methodology since 1992. In 2009, the sample includes 11,263 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 remuner-ation 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 2006 – 1st quarter 2010 (kroons)

	Year	1st quarter	2nd quarter	3rd quarter	4th quarter
2006	9 407	8 591	9 531	9 068	10 212
2007	11 336	10 322	11 549	10 899	12 270
2008	12 912	12 337	13 306	12 512	13 117
2009	12 264	12 147	12 716	11 770	12 259
2010		11 865

Read more from Statistics Estonia 

Tallegg exports rose five times

The Estonian poultry company AS Tallegg exported 207 tons of broiler meat to Finland, Sweden and Denmark in the first six months of this year, almost five times more than the 42 tons exported during the same period a year ago. The company is planning to boost the share of exports from the current 25% of its total output to 40% by 2013.
“There’s a lot of demand in Nordic countries for high quality broiler fillet and this is a very important and growing export channel for Tallegg. Also strategically important for Tallegg is the sale of chicken wings to Asia, in which direction we are hoping the range of our exports to expand soon,” Tallegg CEO Teet Soorm said.
He said the company was seeking to establish a foothold on more and more foreign markets as on the small Estonian domestic market growth opportunities remain limited. However, Estonia remains the primary market for Tallegg and the entire product development is done with Estonian needs in mind, Soorm added. “We also consider Latvia as almost our home market – we sell a broad range of products there in the amount of more than 200 tons a month,” said Soorm.
Tallegg is part of the HKScan group. In 2009, the company raised 8.6 million broilers, produced 75 million eggs and sold 18.2 million kilograms of poultry meat and products.
Sales in 2009 totalled 688 million kroons and the company employs 470 people.

Source: Estonian Review

Italian carrier to operate flights between Tallinn, Forli this summer

The Italian carrier WindJet is scheduled to operate direct flights between Tallinn and Forli, Italy, from 30 June until the end of summer, the daily Eesti Päevaleht reported. The once-weekly flights will depart from Forli at 10 a.m. and from Tallinn at 3 p.m. on Wednesdays. The flight takes three hours.
The Swedish representative of the Italian tourism agency has said the flights would be operated until 1 September.
According to WindJet’s website, a one-way trip costs around 100 euros and a return trip 205 euros including fees. Estonian Air operates regular flights to two Italian destinations during the summer, flying to Milan twice a week and to Rome once a week.

Source: Estonian Review

British shirt-maker adopts Estonian robotic mannequin

OU Massi Miliano, which markets a robotic mannequin under the Fits.me trade name, recently started co-operation with the British shirt-maker Hawes & Curtis, launching at the end of April the world’s first virtual fitting room on the firm’s website.
Online sales of Hawes & Curtis amount to the equivalent of 100 million kroons (EUR 6.4 mln) annually and the Estonian company’s task is to increase this figure, Massi Miliano head Heikki Haldre said. According to Haldre, the first week’s statistics show that if usually an average of two out of a hundred visitors of an online shop make a purchase, the number rose to eight after the adoption of Fits.me. “Furthermore, we obtained the measurements of close to 10 000 persons in a week,” he said.
Fits.me hopes to launch co-operation with several more companies within a couple of months, Haldre said. “It’s too soon to disclose any names,” he added.
The Fits.me robotic mannequin was developed by Alvo Aabloo, professor of polymeric materials technology at the Technology Institute of Tartu University, and professor Maarja Kruusmaa at the biorobotics centre of the Tallinn University of Technology. The Estonian Development Fund has invested 10 million kroons in the company. Other investors were business angels and Webmedia. The investors acquired a minority stake in Massi Miliano.

Source: Estonian Review