Interest margins on housing loans grew

Corporate lending amounted to 577 million euros in the first month of the year. This is 19% more than at the same time a year ago. The notable growth in new loans has been increasingly affected by the borrowing behaviour of the trade sector – in January, the trade sector’s loans accounted for almost half of new corporate loans, with this sector’s enterprises borrowing 39% more than in January 2011. The borrowing of industry and the logistics sector was, on the other hand, lower than a year ago, referring to smaller external demand.

Households, too, took out less loans than in January 2011. Borrowing was mostly reduced on account of consumption, with consumer credit turnover a fifth smaller than a year ago. New housing loans grew 19% in January, year-on-year. This was partly due to the low reference base at the start of 2011, since the adoption of the euro triggered people to buy more real estate at end-2010.

Loan repayments continued to exceed the volume of new loans and the real sector’s loan and leasing portfolio contracted by 40 million euros (0.3%) in January. The corporate loan and leasing stock even increased as a result of more active borrowing, but households’ loan portfolio shrinkage was nevertheless larger. The real sector’s loan and leasing stock has declined by 3.9%, year-on-year, accounting for 14.4 billion euros by the end of January.

The interest rate margins on housing loans increased for the third consecutive month, to 1.9% by the end of January. However, since tensions in money markets eased somewhat, the 6-month EURIBOR decreased by a total of 0.2 pp in January. As a result, the average interest rate on housing loans remained unchanged at 3.4%. The more volatile interest margin on long-term corporate loans declined slightly, to 4.0%.

After notable improvements in the loan portfolio quality in December 2011, there occurred no major changes in January. The share of loans overdue by more than 60 days in real-sector loans remained at 4.8%.

Household deposits increased by 22 million euros in January. Compared to the same time a year ago, households’ deposits have increased 10%, to 4.3 billion euros. Corporate deposits decreased, due to seasonal factors, by 49 million euros, but were nevertheless 2.8% larger than in January 2011. By the end of January, households and companies had a total of 7.9 billion euros in their bank accounts.

Author:  Viljar Vald, Financial Sector Policy Division of Eesti Pank, Specialist in Charge

Read more from the Bank of Estonia website

Estonians make 5.19 euros per hour

According to Statistics Estonia, in the 4th quarter of 2011, the average monthly gross wages and salaries were 865 euros and the average hourly gross wages and salaries were 5.19 euros. Compared to the 4th quarter of 2010, the average monthly gross wages and salaries grew 6.3% and the average hourly gross wages and salaries by 7.4%.

 

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 2.1% in the 4th quarter of 2011. Compared to the same quarter of the previous year, the real wages increased for the second quarter in succession. Before that the real wages had been in decline for eleven quarters.The average monthly gross wages and salaries without irregular bonuses and premiums increased 6.1%. Compared to the 4th quarter of 2010, the irregular bonuses and premiums per employee grew 11.6% and influenced the growth of the average monthly gross wages and salaries by 0.2 percentage points.

According to the Wages and Salaries Statistics Survey, the number of employees increased by 1.7% compared to the same period of 2010.

Compared to the 4th quarter of 2010, the average monthly gross wages and salaries increased the most in wholesale and retail trade (11.8%), and decreased only in other service activities (4.5%).

Compared to the 4th quarter of 2010, the average hourly gross wages and salaries increased the most in real estate activities (15.5%), and decreased only in other service activities (9.0%).

The average gross wages and salaries were 813 euros in October, 868 euros in November and 918 euros in December.

In the 4th quarter of 2011, the employer’s average monthly labour costs per employee were 1,175 euros and the average hourly labour costs were 7.54 euros. Compared to the 4th quarter of 2010, the average monthly labour costs per employee increased by 6.3% and the average hourly labour costs by 7.0%.

Compared to the 4th quarter of 2010, the average monthly labour costs per employee increased the most in wholesale and retail trade (12.1%) and decreased only in other service activities (4.7%).

Compared to the 4th quarter of 2010, the average hourly labour costs increased the most in real estate activities (14.3%) and decreased the most in other service activities (6.2%).

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.

Average monthly gross wages and salaries, 1st quarter 2007 – 4th 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   792 857 809 865

Average monthly gross wages and salaries and monthly labour costs per employee, 4th quarter 2011

Diagram: Average monthly gross wages and salaries and monthly labour costs per employee, 4th quarter 2011

Average hourly gross wages and salaries and hourly labour costs, 4th quarter 2011

Average hourly gross wages and salaries and hourly labour costs, 4th quarter 2011

Source: Statistics Estonia