The producer price index of industrial output decreased in August

According to Statistics Estonia, in August 2014, the producer price index of industrial output changed by -0.1% compared to July 2014 and by -1.0% compared to August 2013.

In August, compared to the previous month, the producer price index was more than average influenced by a decrease in prices in electricity, gas, steam and air conditioning supply and in the manufacture of fuel oils, but also by an increase in prices in mining.

Compared to August 2013, the producer price index was more than average influenced by a decrease in prices in electricity, gas, steam and air conditioning supply and in the manufacture of electronic equipment, but also by an increase in prices in the manufacture of wood and wood products and metal products.

Change in the producer price index of industrial output by economic activity, August 2014
Economic activity according to EMTAK 2008 August 2014 –
July 2014, %
August 2014 –
August 2013, %
TOTAL -0.1 -1.0
Manufacturing 0.0 -0.1
Mining 10.5 1.3
Electricity, gas, steam and air conditioning supply -5.7 -9,7
Water supply; sewerage; waste management and remediation activities 0.2 1.0

In August 2014, the export price index changed by -0.5% compared to July 2014 and by -2.6% compared to August 2013.

In August, compared to the previous month, the prices of electricity, agricultural and oil products decreased more than average, whereas the prices of parts and accessories for motor vehicles, and wood and wood products increased more than average.

In August 2014, the import price index changed by -0.7% compared to July 2014 and by -1.5% compared to August 2013.

In August, compared to the previous month, the prices of electricity, oil products and agricultural products decreased more than average, whereas the prices of leather products, wearing apparel and paper and paper products increased more than average.

Source: Statistics Estonia

The digital gap between generations is decreasing

According to Statistics Estonia, in the 1st quarter of 2014, 83% of households in Estonia had access to the Internet at home. The gap between the younger and older population in computer and Internet use is decreasing.

Compared to the same period of the previous year, the percentage of households with an Internet connection has increased by 4 percentage points.  Almost all households with children (98%) and three-quarters of households without children (78%) had the possibility to use the Internet at home. While Internet access at home is the least common in single-person households (71%), the share of those having Internet access at home has grown the most (two-fold) in specifically this group in the previous five years.

Although a fixed broadband connection (wired or wireless) is still the most prevalent among homes with Internet access, the share of fixed broadband connections at homes has decreased in the last two years, giving way to the use of mobile internet connections. In the 1st quarter of 2014, 61% of households with Internet access at home used a mobile internet connection (in 2010, the share was only 6%).

Among persons aged 16–74, 84% have used a computer and the Internet. Compared to the same period of the previous year, the share of Internet users has increased by five percentage points. Although the older population uses computers and the Internet less than the young, the gap between younger and older Internet users has still been decreasing from year to year. 70% of 55–64-year-olds and 44% of 65–74-year-olds had used the Internet, and the share of Internet users has increased the most in those age groups, compared to the previous year (by 7 and 13 percentage points, respectively).

In addition to the growth in the number of Internet users, the frequency of Internet use has also increased. In the 1st quarter of 2014, 86% of Internet users used it daily (80% in 2013). Nine out of ten 16–74-year-olds had recently (in the last 3 months) used Internet banking, sent e-mails, sought information and read the news on the Internet. 60% had participated in social networks, 50% had made telephone calls via the Internet, and one-third had watched television or listened to radio programmes online.

49% of 16–74-year-olds used the Internet for purchasing goods or services. The products and services purchased online the most were: clothes or sports goods, travel and accommodation services, and tickets for concerts, cinema, theatre and other events.

Slightly more than three-quarters of enterprises with 10 and more employees have a website, which is mainly used for presenting products and services. A quarter of enterprises having  a webpage provides information on job openings on their site or offers the possibility to submit job applications online. Online ordering or booking is available in 14% of enterprises having a webpage.

Year by year, the number of enterprises using the ID card has been growing steadily. Estonian enterprises use the ID card mainly for digital signatures but also for user verification in different information systems. Nearly a fifth of enterprises are very satisfied and a quarter of enterprises are satisfied with the e-services supplied by the government.

Statistics Estonia studies the use of information technology in households and among persons aged 16–74 as an independent survey since 2014 (from 2005 to 2013 it was part of the Labour Force Survey). The survey is carried out in the 2nd quarter; the reference period is the 1st quarter. A household is a group of persons who live at the same address and share joint financial resources and whose members consider themselves to be members of one household, while a family is based on family relationships or kinship.

Statistics Estonia has surveyed the use of information technology in enterprises since 2001. In 2014, approximately 3,000 enterprises participated in the survey. The survey involves enterprises with 10 or more persons employed.

The use of information technology in households, by individuals aged 16–74 and in enterprises is studied by statistical organisations in all the Member States of the European Union on the basis of a harmonised methodology.

Source: Statistics Estonia

Estonia attracting foreigners

At a time when in the last five years, Estonian labour market has lost about 40,000 people and, according to forecasts, another 40,000 will be leaving in the next five years, more and more foreigners are being attracted to Estonia in the hope to find better life, writes Äripäev.

One of such foreigners is Finn Pauliina Purkola, owner of creative agency WTF Group, who moved to Estonia together with his husband this summer in order to escape the negativity and pessimism of Finland.

The difference is that people moving to Estonia from the West are usually business owners, while people coming from the East are looking for employment.

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Report proposes 329 euro per household minimum income

Every fifth person in Estonia lives in relative poverty and a 329 euro per household guaranteed income would be enough to tackle poverty, a European Anti-Poverty Network (EAPN) report said.

EAPN organized a debate in Parliament on Wednesday, saying that the European Parliament has approved a resolution that a minimum income should be 60 percent of a nation’s median income, which works out to 329 euros per household in Estonia.

Tallinn University professor Lauri Leppik said a 329-euro per month guaranteed income would cost 208 million euros annually – 1.2 percent of GDP.

Riina Solman, the Estonian coordinator for EAPN, told ERR radio that people are not able to survive with the current model of benefits.

Solman said the 329-euro figure is a few years old and only takes into consideration the very basic requirements. She said the figure should be reevaluated, and expenses such as a internet conection, which is vital for school children, also added.

Solman said not only those on benefits fall into the relative or absolute poverty categories, but also people with jobs.

Source: ERR News

GrabCAD sold for 77 mEUR

The world’s largest 3D printer manufacturer, Stratasys, signed a deal to buy GrabCAD, an Estonian-founded startup, on Tuesday.

The sale will be finalized at the end of the month with CEO Hardi Meybaum continuing as head of the company. Techcrunch.com valued the sale at around 100 million US dollars, or 77 million euros.

Meybaum said the two companies share the same vision of the evolution of design and manufacturing, adding that GrabCAD will now have better resources to develop.

GrabCAD is a collaborative product development tool designed to help engineering teams manage, view and share computer-aided design files. It has more than one million users.

The company was founded in 2009 by Meybaum in Estonia, but moved to the United States in 2011.

Source: ERR News

The University of Tartu received a new physics building

The University of Tartu received the keys to a new physics building, the 13,000 square meter Physicum.

Construction work began two years ago, but the need for a new building was apparent before as no less than last five heads of the physics institute had worked on plans to build a new structure.

The building cost 16 million euros, 85 percent of which came from EU funding.

The current head of the Institute of Physics, Jaak Kikas, said the biggest advantage is that research and study are now united under one roof.

He said the new building is close to other University of Tartu science buildings, creating a mini science city, which could see expansion in the future.

Four science centers and 14 physics laboratories will move into the new building, offering new and improved opportunities in physics, materials science and nanotechnology.

Source: ERR News

GDP growth has been faster than what was reported before

GDP data magic

• GDP growth has been faster than what was reported before
• But growth is still unbalanced …
• … and downside risks prevail

GDP growth has been faster than what was reported before
Economic growth in Estonia looks much stronger in the first half of this year after the substantial data revisions by the Statistical Office this September. There was no decline in economic activity in the first quarter as was reported earlier. According to the revised data, GDP growth accelerated from 0.3% in the first quarter to 2.4% in the second quarter. Higher GDP growth is more in line with other economic indicators, i.e., the fast growth in wages, retail sales, and real estate prices.

But growth is still unbalanced and therefore unsustainable …
In the second quarter of this year, economic growth was still too dependent on private consumption. Investments grew modestly. The growth of exports remained small, affected by weak external demand and increased geopolitical tensions. In a tiny, open economy like Estonia, consumption-based growth cannot continue for long, if exports and investments do not pick up.

… and downside risks prevail
As the economic growth rate of Estonia for the first half of the year was lifted considerably, analysts might consider revising their forecasts upwards later this year. At the same time, negative external risks have clearly grown. The Russia-Ukraine conflict and new round(s) of sanctions from both sides have increased the instability in the region and will dampen trade and investment flows.

Source: Swedbank

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