The Dwelling Price Index continued to increase in 1Q

According to Statistics Estonia, in the 1st quarter of 2018, the Dwelling Price Index changed by 1.5% compared to the 4th quarter of 2017 and by 6.6% compared to the 1st quarter of previous year.

Compared to the previous quarter, the prices of apartments increased by 1.9% and the prices of houses by 0.4%. Compared to the 4th quarter of 2017, the prices of apartments increased by 0.3% in Tallinn, by 4.6% in areas bordering Tallinn with Tartu and Pärnu cities, and by 6.1% in the rest of Estonia.

Compared to the 1st quarter of 2017, the prices of apartments have increased by 6.7% and the prices of houses by 6.2%. Compared to the 1st quarter of the previous year, the prices of apartments increased by 6.8% in Tallinn and by 9.8% in areas bordering Tallinn with Tartu and Pärnu cities, but decreased by 0.5% in the rest of Estonia.Dwelling price index, 1st quarter 2005 – 1st quarter 2018 (2010=100)

The Dwelling Price Index expresses the changes in square metre prices of transactions made by households for the purchase of dwellings. The Dwelling Price Indices have been compiled for apartments and houses (detached, semi-detached and terraced houses).

In the 1st quarter of 2018, the Owner-Occupied Housing Price Index changed by 4.4% compared to the 4th quarter of 2017 and by 9.8% compared to the 1st quarter of 2017.

The Owner-Occupied Housing Price Index expresses the changes in the prices of the acquisition of dwellings new to the household sector and other goods and services that households purchase in their role as owner-occupiers. The index consists of four parts: the acquisition of dwellings, other services related to the acquisition of dwellings, major repairs and maintenance, and insurance connected with dwellings.

The Owner-Occupied Housing Price Index is published on the base year 2010 = 100. The time series starts from the 1st quarter of 2005; major repairs and maintenance are included from the 1st quarter of 2007 and insurance connected with dwellings is included from the 1st quarter of 2012.

The prices of the 4th quarter of 2017 used as base prices have been calculated on the basis of the administrative division as at 01.01.2018.

For the statistical activity “Dwelling price index and owner-occupied housing price index”, the main representative of public interest is the Ministry of Finance commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Cinema attendance set a new record

According to Statistics Estonia, in 2017, cinema attendance set a new record, surpassing 3.5 million visits for the first time. Cinema attendance has doubled in the last ten years. The rising popularity of cinemas can be explained by an increase in the number of cinemas and a wider selection of films as well as by the generally higher living standard.

In the last year, 355 films were distributed in Estonian cinemas, of which 28 were produced in Estonia. For the second year running, more than half of the films distributed were imported from European countries. At the same time, the proportion of films produced in the United States continues to decrease, and for the first time in this century, films produced in the United States accounted for less than one third of the films distributed in Estonian cinemas.

Although more and more films distributed in cinemas are produced in Europe, films produced in the United States are still the most popular. The animation “Despicable Me 3” was the most viewed film of the year, with a total attendance of nearly 149,000. Over a half of cinema-goers saw films produced in the United States, while the attendance of European films accounted for less than a quarter of all cinema visits. As many European films are screened during special festivals, they are typically screened for a shorter period and attract less viewers than Hollywood blockbusters.Distribution and attendance of films distributed in Estonian cinemas by country of origin, 2017

The most popular Estonian film was “Sangarid”, with an attendance of over 85,000. In total, Estonian films were seen in cinemas 282,000 times and grossed more than 1.5 million euros. The box office of Estonian films accounted for 8% of the total box office in Estonia (19.4 million euros).

22 full-length films were produced in Estonia in 2017, including 11 feature films and 11 documentaries. 30 short feature films, 70 short documentaries and 7 short animations were also produced during the year. Although animations remain popular in Estonian cinemas, no animations have been produced in Estonia in the last five years.

Full-length film – a film of a duration of at least 60 minutes. Short film – a film of a duration of less than 60 minutes.

For the statistical activity “Film”, the main representative of public interest is the Ministry of Culture, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

There is great demand in Estonia for faster payments

Estonia is moving together with the rest of the euro area firmly in the direction of interbank payments taking only seconds and being made on national holidays and weekends as well, said Deputy Governor of the central bank, Madis Müller, at a debate on instant payments held at Eesti Pank.

“There is certainly demand in Estonia for instant payments, as surveys show that 70% of people in Estonia want interbank transfers to be faster than they are at present. More than one third want money to reach the payee in less than five minutes”, explained Mr Müller.

He added that being a small country gives Estonia advantages. Currently SEB is the only bank that offers instant payments to its clients, but if only five banks join the instant payment system, it would be possible to make almost all interbank payments instantly.

The European Payments Council estimates that the majority of banks in the euro area will be offering their clients instant payments by 2020. So far, 580 banks in Europe have joined the instant payments system. SEB started to offer its clients the instant payment service from last November. All banks and payment service providers have been able to join the pan-European instant payment system since the end of November 2017. The system allows payments to be made from one bank to another within only seconds. In Latvia the instant payment service is offered by SEB and also by Citadele. An average of 10,000 instant payments are made in total in Europe each day, and the majority of those payments are initiated in the Baltic region.

Participants in the debate were Deputy Governor of Eesti Pank Madis Müller, Chairman of the Executive Board of Tallinna Kaubamaja group Raul Puusepp, Chairman of the Management Board of SEB Allan Parik, and Product Manager at TransferWise Lars Trunin. The panel discussion was chaired by technology journalist Ronald Liive.

Source: Bank of Estonia

Passenger traffic and shipment of goods increased in 2017

According to Statistics Estonia, in 2017, compared to 2016, the number of international traffic passengers served by Estonian ports increased by 3%, the number of national traffic passengers increased by 7% and the freight volume of ports in tonnes increased by 3%.

Last year, a record number of passengers used the services of Estonian ports. In 2017, nearly 10.9 million passengers visited Estonian ports by international transport, which is 3% more than in 2016. The growth was mainly due to a gradual increase in the number of passengers travelling between Estonia and Finland, which reached 9 million. 160,000 more passengers arrived from Finland and 114,600 more passengers departed to Finland compared to 2016. Between Estonia and Sweden, 1.3 million sea passengers were transported, i.e. 7% more passengers compared to the previous year. 592,300 cruise passengers arrived by sea, i.e. 19% more than the year before. Three out of four passengers used Estonian ships in international sea traffic.

The number of passenger ship calls at Estonian ports in international sea traffic was around 6,170, i.e. 1% less passenger ships (incl. ro-ro passenger ships) than in 2016, and 326 cruise ships (285 in 2016) called at Estonian ports. On international routes, around 2 million vehicles (excl. transit vehicles) were served by ports; 71% were passenger cars and 26% were trucks and trailers.

On main national ship lines, around 2.4 million passengers were transported, which is 7% more than in 2016. On those lines, 899 ship trips more were made than in 2016 (in 2016, there were over 15,200 trips, and in 2017, over 16,100 trips). On main national lines, approximately 1.02 million vehicles were served, i.e. 85,700 more vehicles than in 2016.

In 2017, Estonian ports handled 34.8 million tonnes of cargo, which is 3%, or 1.2 million tonnes more than the year before. 23.5 million tonnes of goods were loaded and 11.3 million tonnes of goods were unloaded in Estonian ports in 2017. 4% more goods were loaded and 2% more goods were unloaded than in 2016. In 2017, 114 more cargo ships called at Estonian ports than in 2016. The average gross tonnage of cargo vessels totalled about 11,100.

Transit goods were loaded and unloaded in ports in the amount of 17.9 million tonnes, which is 1% less than in 2016. 12.7 million tonnes of transit cargo were loaded and 5.1 million tonnes unloaded at Estonian ports. The most frequently handled group of transit goods at Estonian ports was refined petroleum products (11.4 million tonnes), although the transport of these products decreased by 5% in a year. The loading and unloading of chemicals and chemical products as transit goods amounted to 4.7 million tonnes, which is 5% more than the year before. In addition to transit goods, 10.7 million tonnes of goods were transported abroad through ports and 6.2 million tonnes of goods arrived at Estonian ports, which is respectively 9% and 10% more than in 2016. Goods transported abroad through ports were mainly a mixture of types of goods transported together (3.1 million tonnes) and products of forestry and logging (nearly 2.2 million tonnes). Goods that arrived at Estonian ports included primarily a mixture of types of goods transported together (3.1 million tonnes) and products of mining and quarrying (1.4 million tonnes).

Sea container transportation through ports (expressed in TEUs) increased by 13% compared to the previous year, amounting to around 230,400 TEUs in 2017. The number of containers shipped out of Estonian ports on vessels was around 111,900 TEUs, and the number received at Estonian ports was nearly 118,500 TEUs.

Passengers and goods transported through ports, 2010‒2017

Source: Statistics Estonia

The profit of the business sector decreased in 1Q by 5 pct

According to Statistics Estonia, in the 1st quarter of 2018, the total profit of the business sector was 584 million euros, which is 5% less than in the same period the year before.

Compared to the 1st quarter of 2017, total profit decreased in most economic activities. Transportation and storage, agriculture, forestry and fishing and energy enterprises made the biggest contribution to the total profit of the business sector. The growth in the sector’s profit was negatively affected mainly by trade enterprises and enterprises specialising in administrative and support service activities.

In the 1st quarter of 2018, enterprises sold goods and services for 13.7 billion euros, i.e. 8% more than in the same period the year before. The biggest year-on-year increase occurred in the turnover of real estate enterprises. The turnover of trade and manufacturing enterprises, which have the biggest share in the total turnover of the business sector, increased respectively by 4% and 7% compared to the 1st quarter of 2017.

Compared to the same quarter of the previous year, the total expenditure of enterprises increased by 9%, including an 8% increase in labour costs. The number of persons employed increased by 2% and the number of hours worked by 1% in a year. Labour productivity of the business sector on the basis of value added amounted to an average of 5,500 euros in a quarter per person employed, i.e. 3% more than in the 1st quarter of 2017.

In the 1st quarter of 2018, enterprises invested 490 million euros, which is 15% less than in the same period the year before. The investments were made mostly in machinery and equipment and in buildings. The main investors were real estate, manufacturing and agriculture, forestry and fishing enterprises, which accounted for more than a half of the total investments of all enterprises. Compared to the 1st quarter of 2017, investments in buildings, computer systems and land increased. Investments in machinery and equipment and in transport equipment decreased.Total profit of the business sector, 1st quarter 2013 – 1st quarter 2018

The statistics are based on the questionnaire “Economic activity, quarter”, the submission date of which was 21 April 2018. Statistics Estonia published the quarterly summary in 26 working days. For the statistical activity “Financial statistics of enterprises (quarterly)”, the main representative of public interest is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Production increased in manufacturing and in energy

According to Statistics Estonia, in April 2018, the production of industrial enterprises increased by 2% compared to April 2017. Production increased in manufacturing and in energy, but decreased in mining.

In April, the total production in manufacturing was 1% higher compared to the corresponding month of 2017. In April, over a half of the branches of industry exceeded the volume of the same month of the previous year. The growth in production was mostly due to an increase in the manufacture of food products, electronic equipment, and machinery and equipment. Production increased considerably also in the manufacture of chemical products and refined petroleum products. Among the branches of industry with larger shares, production fell in the manufacture of building materials, textiles and furniture.

In April, 69% of the total production of manufacturing was sold to the external market. According to unadjusted data, sales of manufacturing production for exports increased by 11% and sales to the domestic market increased by 10% compared to April 2017.

In April 2018, compared to March, the seasonally adjusted total industrial production decreased by 1%. The production of manufacturing remained at the level of the previous month.

Compared to April 2017, the production of electricity increased by 11% and the production of heat by 30%.

Volume index of production in manufacturing and its trend, January 2009 – April 2018

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Less tourists in Estonian hotels in April

According to Statistics Estonia, in April 2018, domestic and foreign tourists staying in accommodation establishments numbered 251,000, which is 3% less than in April 2017. The number of foreign tourists decreased, while the number of domestic tourists stayed at the level of the previous year.

151,000 foreign tourists stayed in accommodation establishments, i.e. 4% fewer than in April 2017. In April, 97,000 tourists, or 64% of the foreign tourists arrived from Latvia, Finland and Russia. Compared to April of the previous year, the number of tourists arriving from Latvia and Finland decreased by 2% and 16%, respectively, while the number of tourists from Russia increased by one fifth. The number of Finnish tourists fell for the third month in succession compared to the same month of the previous year. The number of tourists arriving from Asian countries continues to increase: in April, there were 7% more tourists arriving from Asian countries than in the same month a year ago. 71% of the foreign tourists preferred to stay in the accommodation establishments of Tallinn. 8% of the foreign tourists stayed in the accommodation establishments of Pärnu city and 7% in Tartu city. 5% of the foreign tourists stayed in the accommodation establishments of Ida-Viru county.

100,000 domestic tourists stayed in accommodation establishments, i.e. as much as in April 2017. The number of nights spent by domestic tourists increased by 3%, which means that the duration of stay of domestic tourists in accommodation establishments increased somewhat. 63% of the domestic tourists were on a holiday trip and 23% on a business trip. 30% of the accommodated domestic tourists stayed in the accommodation establishments of Harju county, 16% in Tartu county, 14% in Pärnu county and 11% in Ida-Viru county.

In April, 956 accommodation establishments offered services for tourists. 20,000 rooms and 45,000 bed places were available for tourists. 44% of the rooms and 35% of the bed places were occupied. The average cost of a guest night was 36 euros, i.e. one euro less than in April 2017. The average cost of a guest night was 40 euros in Harju county, 39 euros in Tartu county and 30 euros in Pärnu county.

Read more from Statistics Estonia

Consumer price index still on the rise

According to Statistics Estonia, the change of the consumer price index in May 2018 was 0.3% compared to April 2018 and 3.0% compared to May of the previous year.

Compared to May 2017, goods were 3.4% and services 2.4% more expensive. Regulated prices of goods and services have risen by 8.0% and non-regulated prices by 1.7% compared to May of the previous year.

Compared to May 2017, the consumer price index was affected the most by more expensive operation of personal transport equipment, which contributed over a quarter of the total increase of the index. Petrol was 14.8% and diesel fuel 11.9% more expensive compared to May 2017. Nearly a quarter of the total increase of the index was contributed by alcoholic beverages and tobacco, which became 13.6% and 5.5% more expensive, respectively. 32.7% more expensive beer contributed two thirds of the price increase of alcoholic beverages and tobacco. Food and non‑alcoholic beverages accounted for over a fifth of the total increase of the index, of which  60% was contributed by 5.4% more expensive milk, milk products and eggs, 12% more expensive ready‑made meals and 9.5% more expensive fresh vegetables. Compared to May of the previous year, of food products, the biggest price increases were seen for eggs (35%), frozen fruit and berries (28%) and butter (23%), and the biggest price decrease was seen for sugar (21%).

Compared to April 2018, in May the consumer price index was affected the most by food and non-alcoholic beverages. In May, eggs were 15.2% and some bakery products 5% more expensive compared to the previous month. A greater impact on the monthly change came also from catering services and accommodation, where the price increase was 1% and 9.4%, respectively.

Change of the consumer price index by commodity groups, May 2018
Commodity group May 2017 – May 2018, % April 2018 – May 2018, %
TOTAL 3.0 0.3
Food and non-alcoholic beverages 2.9 0.8
Alcoholic beverages and tobacco 11.2 0.3
Clothing and footwear 1.0 1.0
Housing 4.2 -0.3
Household goods -0.4 -0.2
Health 4.5 0.0
Transport 3.8 0.5
Communications -4.6 -2.2
Recreation and culture 1.3 -0.3
Education -5.4 1.3
Hotels, cafés and restaurants 4.0 2.5
Miscellaneous goods and services 3.2 0.4

Statistics Estonia publishes the consumer price index on the 5th working day of each month, after the end of the reporting period. For the statistical activity “Consumer price index”, the main representative of public interest is the Ministry of Finance, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Exports of goods increased by 16 pct in April

According to Statistics Estonia, in April 2018, the exports of goods increased by 16% and imports by 13% compared to April 2017. The growth in trade in April of this year was broad-based, with increased exports and imports in both mineral products and mechanical appliances.

In April 2018, exports from Estonia amounted to 1.2 billion euros and imports to Estonia to 1.4 billion euros at current prices. The trade deficit was 171 million euros (in April 2017, it was 185 million euros).

In March, the top destination countries of Estonia’s exports were Finland (16% of Estonia’s total exports), Sweden (12%) and Latvia (10%). Electrical equipment and base metals and articles of base metal were the main commodities exported to Finland; electrical equipment and miscellaneous manufactured articles (prefabricated wood buildings, furniture) were the main commodities exported to Sweden; mineral products (motor spirit, electricity) and transport equipment (motor cars) were the main commodities exported to Latvia. The biggest increase occurred in exports to Finland (up by 34 million euros), Latvia (up by 33 million euros) and the USA (up by 19 million euros). In exports to Finland, the exports of electrical equipment and wood and articles of wood increased. There was also an increase in the exports of mineral products and transport equipment to Latvia and electrical equipment to the USA. The biggest decrease occurred in exports to Sweden (down by 16 million euros).

In April, the biggest share in the exports of goods was held by electrical equipment (15% of the total exports of goods), followed by mineral products (13%), and wood and articles of wood (11%). The greatest increase was in the exports of mineral products (up by 50 million euros), mechanical appliances (up by 25 million euros) and transport equipment (up by 21 million euros). The growth in the exports of mineral products was mainly due to increased export quantities (motor spirit up by 51% and electricity up by 31%), compared to the same period of the previous year.

The share of goods of Estonian origin in total exports was 70% in April 2018. The exports of goods of Estonian origin increased by 14% and re-exports by 23%. Increased exports in the commodity sections of mineral products, wood and articles of wood and mechanical appliances contributed to the increase in the exports of goods of Estonian origin. Among the main destination countries, the exports of goods of Estonian origin had the highest share (over 90%) in exports to the Netherlands, Denmark, Sweden and Norway.

The main countries of consignment in April were Finland (14% share of Estonia’s total imports), Germany (11%) and Sweden (10%). The main commodities imported were: mineral products and metals and articles of base metal from Finland; mechanical appliances and transport equipment from Germany; and electrical equipment and transport equipment from Sweden. The biggest increase occurred in imports from Finland (up by 42 million euros), Belarus (up by 33 million euros, i.e. approximately 8 times) and Sweden (up by 26 million euros). Mineral products (motor spirit, fuel additives) were imported more from Finland and Belarus, electrical equipment from Sweden. Imports decreased the most from Poland (down by 25 million euros) and Turkey (down by 21 million euros), with less transport equipment imported.

The main commodities imported to Estonia were electrical equipment (15% of Estonia’s total imports of goods), mineral products (13%), mechanical appliances and transport equipment (both 11%). The greatest increase was in the imports of mineral products (up by 67 million euros), mechanical appliances (up by 30 million euros) and electrical equipment (up by 21 million euros). Increased imports of mineral products were due to higher import quantities (imports of fuel additives increased by approximately 4 times and imports of motor spirit by 31%), compared to the same period of the previous year.  In April, the greatest decrease occurred in the imports of transport equipment (down by 48 million euros).

In April 2018, the foreign trade export volume index increased by 16% and the import volume index by 12% compared to April 2017.Estonia’s foreign trade by month, 2016–2018

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The number of people of working age rose

  • The growth in employment has been boosted by a rise in the number of entrepreneurs
  • The Work Ability Reform raised unemployment by less than forecast as demand for labour is strong
  • The number of people of working age rose for the first time in more than 20 years

The Estonian labour force survey found that the unemployment rate in Estonia rose in the first quarter of 2018 to 6.8%, as people engage more actively in the labour force. Employment rose at the same time, though at a slower rate than previously. The state of the labour market has not deteriorated from the second half of last year. Registry data suggest that the wide volatility in labour market indicators can largely be explained by the variability in the quarterly assessments of the labour force survey.

Employment was raised strongly both last year and at the start of this year by a rise in the number of one-person businesses and businesses with employees. The labour force survey shows the number of waged employees to be slightly lower than it was a year earlier. Registry data from the Tax and Customs Board show that 1.6% more people received a declared wage in the first quarter of 2018 than in the same quarter of the previous year. There was a rise in the number of employees in the private sector and a fall in the number in government institutions.

Without the Work Ability Reform, participation in the labour force would have increased more slowly and the number unemployed would have fallen. The number registered as unemployed has risen since the Work Ability Reform was launched. Now around one third of the 33,000 registered unemployed in Estonia have reduced ability to work. Leaving out random fluctuations from quarter to quarter, there has been no clear upward trend in the total unemployment rate in recent years. This is because the reform was well timed, as people with reduced ability to work can find a job more quickly at times of labour shortages than otherwise.

The updated estimate by Statistics Estonia is that the number of people aged 15-74 did not fall in 2017, but in fact rose by 0.1%. This is partly because Estonia has become a more attractive place to work for foreign labour, and partly because residents of Estonia who had previously gone to work abroad temporarily are returning. The improved migration balance means there is a larger supply of labour in the Estonian labour market and the wage pressures caused by labour shortages have been eased. The experience and skills of workers coming from abroad offer opportunities for businesses to develop.

Source: Bank of Estonia

Author: Orsolya Soosaar, Economist at Eesti Pank