SEB: construction sector suffers a major slowdown in 2014

The SEB Business Barometer projects economic growth in 2014 will be led by industry, wholesalers and exporters, while the construction sector suffers a major slowdown.

According to the study released today, the share of Estonian companies surveyed that are planning investments in excess of 30,000 euros decreased from 48 percent for this year to 41 percent for next year.

The share of those planning innovation activity decreased from 62 percent to 59 percent. Size seems to matter here, as the innovation leaders will be larger firms and industrial firms – the latter will also provide a predicted 30 percent of new jobs next year. By region, innovation will be greatest in Saaremaa and Hiiumaa (even though Ida-Viru County leads the industrial sector), according to the findings.

On the other hand, firms focused on the domestic market had less significant plans for investment and innovation.

The construction sector faces harder times ahead, with one in four companies predicting a decline in turnover, and accounting for as much as 40 percent of next year’s job loss. On a positive note, 92 percent of companies overall predict growth in turnover in 2014, thanks largely to domestic demand.

The greatest growth is expected in Pärnu County, where every third company expects turnover to grow by over 15 percent.

The share of exporters expecting to expand to existing or new markets was 31 percent, down by 5 percent from the year before.

Source:  ERR via Estonian Review