Retail shops sold for 651 million euros in August

According to Statistics Estonia, in August, the turnover of retail trade enterprises was 651 million euros, having increased by 4% at constant prices compared to August 2018.

The turnover of stores selling manufactured goods increased by 5%. Turnover increased the most in stores selling textiles, clothing and footwear, with sales increasing 9% year on year. A higher than average increase occurred in stores selling household goods and appliances, hardware and building materials and in stores selling second-hand goods and non-store retail sale (stalls, markets, direct sales). In both economic activities, the growth was 6%.

The turnover of grocery stores increased by 4% and the turnover of enterprises engaged in the retail sales of automotive fuel by 2%.

Compared to the previous month, the turnover of retail trade enterprises decreased in August by 2%. According to the seasonally and working-day adjusted data, the turnover increased by 1%. In the first eight months of 2019, the turnover of retail trade enterprises increased by 5% compared to the same period of the previous year.

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The use of Internet in Estonia

According to Statistics Estonia, in 2019, 90% of households had internet connection at home and it is used daily or almost daily by 98% of 16–44-year-olds. Enterprises contribute increasingly to improving their ICT security measures and policies.

From households, over 99% of families with children had internet at home. In families of single parents, 99.5% had fixed broadband connection (98.2% in 2018). In the last three months, 98% of 16–44-year-old internet users used the interned daily or almost daily. This share among 65–74-year-olds increased from 71% to 75%. Internet was accessed via mobile phone away from home or work by 83.3% of internet users and 36.6% used a portable computer. Both shares have increased compared to the previous year. The comparison of different age groups reveals a clear trend – the younger the internet users the higher the percentage of those who access the internet while on the move or via mobile phone.

Among 16–74-year-olds, nine out of ten internet users continue to use the internet to send e-mails and use internet banking services. 72% of internet users listened to music and participated in social networks. Using the internet for calling has increased the most. Using the internet to seek information on goods and services (from 89.5% to 86.4%) and selling own goods and services over the internet, incl. auctioning (from 26.6% to 20.2%), have decreased.

In the last 12 months, every third internet user booked a transport service (Bolt/Uber) and every fourth booked an accommodation service (Airbnb.com) from a private person through a website or a mobile app. Accommodation services were booked via the website or mobile app by men and women in equal numbers but men booked transport services more (34.9% for men and 30.5% for women). 75% of internet users bought a product or service from the internet; this is 7 percentage points more than the year before. 77% of female and 73% of male internet users used the internet for this reason (respectively 71% and 65% the year before). The products ordered the most from the internet were travel and accommodation services (70%), insurance policies (66%) and tickets to different events (concert, cinema, theatre, etc.) (61%). Clothing, footwear and sports goods were bought by every second and food and essential goods by every third e-commerce user.

In 2019, 15% of Estonian enterprises employed ICT specialists, which is 2% more than the year before. Enterprises employing ICT specialists were more numerous in the group of enterprises with 250 and more persons employed. The survey “Information technology in enterprises” in 2019 focused also on ICT security. The results reveal that the majority of Estonian enterprises use security measures. The security measure used the most include strong password authentication, keeping the software up-to-date, network access control and data backup to a separate location. 7% of enterprises used user identification and authentication via biometric methods (based on fingerprints, voice or face).

Enterprises consider ICT security important and work in that area is ongoing: in the last two years more than a fifth of enterprises have established or amended their security policy. Dealing with ICT security issues is also important due to security incidents. 9% of enterprises had at least one ICT security incident in the past year. The largest number of security incidents concerned the unavailability of ICT services due to the denial of service or ransomware attacks. Enterprises had some experience with the destruction or corruption of data and damage was experienced also as a result of the disclosure of confidential data. The majority (91%) of enterprises, however, did not have security incidents in the past year.

Most Estonian enterprises have a website or web page as part of their parent company’s website, mainly introducing products and services. A fourth of enterprises have online ordering or booking options on their website. Almost a fifth of Estonian enterprises sold products or services via their website. Online sale is more widespread in wholesale and retail trade, accommodation and food service activities and in information and communication. 18% of enterprises selling their products or services online sold them in Estonia. 8% of enterprises sold via the website to European countries. In 2018, the share of online sale accounted for 7% of the turnover of enterprises.

The use of information technology among persons aged 16–74, households and enterprises is studied based on a harmonized methodology in all European Union Member States. Statistics Estonia studies the use of information technology in households and among inhabitants aged 16–74 annually in the 2nd quarter. From 2005 to 2013, this was part of the Labour Force Survey, since 2014 an independent survey. 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. It differs from family, which is based on family relationships or kinship.

Statistics Estonia has surveyed the use of information technology in enterprises since 2001. 3,400 enterprises participated in the survey in 2019. The survey involves enterprises with 10 or more persons employed.

For the statistical activity “Information technology in households” and “Information technology in enterprises” 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 activities.

Source: Statistics Estonia
See graph here

Exports 1.2 b EUR and imports 1.4 b EUR in July

According to Statistics Estonia, in July 2019, compared to July 2018, the exports of goods decreased by 2% and imports increased by 5%. The share of goods of Estonian origin was the lowest in recent years—66% of total exports.

In July, exports from Estonia amounted to 1.2 billion euros and imports to Estonia to 1.4 billion euros at current prices. The exports of mineral products (shale oil, motor spirit, fuel additives) decreased by nearly half, but the decline was offset by increased exports in other commodity groups. The trade deficit was 211 million euros, which was 88 million euros more than in the same period last year.

In July, the top destination countries of Estonia’s exports were Finland (16% of Estonia’s total exports), Latvia (10%) and Sweden (9%). Electrical equipment and base metals and articles of base metal were the main commodities exported to Finland; mineral products (fuel additives, electricity), agricultural products and food preparations (milk, beer) to Latvia; miscellaneous manufactured articles (prefabricated wood buildings) and wood and articles of wood (pulpwood, sawn timber) to Sweden. The biggest decrease occurred in exports of mineral products to Saudi Arabia (down by 46 million euros). The biggest increase occurred in exports to Lithuania (up by 22 million euros), Denmark (up by 19 million euros) and Latvia (up by 16 million euros). The biggest increase in exports to Lithuania was in transport equipment (cars); and to Denmark and Latvia in exports of mineral products.

The biggest share in exports of goods was held by electrical equipment (15% of Estonia’s total exports), followed by mineral products (12%) and mechanical appliances (10%). The biggest impact on the decline in exports came from mineral products (down by 125 million euros). The biggest increases were in exports of transport equipment (up by 26 million euros) and mechanical appliances (up by 26 million euros).

The exports of goods of Estonian origin decreased by 10% compared to July 2018, while re-exports increased by 16%. In the exports of goods of Estonian origin, the biggest decrease was in the exports of mineral products and the biggest increase was in mechanical appliances and miscellaneous manufactured articles.

In July, the main countries of consignment were Finland (13% of Estonia’s total imports), Germany (11%), Lithuania and Russia (both 10%). The main commodities imported were: mineral products and base metals, and articles of base metal from Finland; transport equipment and mechanical appliances from Germany; mineral products, agricultural products and food preparations from Lithuania; and mineral products from Russia. Imports increased the most from Russia (up by 25 million euros), Sweden (up by 22 million euros) and from Finland (up by 20 million euros). From Russia, imports of mechanical appliances, from Sweden of transport equipment, and from Finland of mineral products increased the most. Imports decreased the most from Belarus (down by 28 million euros), due to a decrease in the imports of mineral products (motor spirit, heavy oil).

The main commodities imported to Estonia were mineral products (13% of Estonia’s total imports), transport equipment and electrical equipment (both 12%). The biggest increase was in the imports of transport equipment, and base metals and articles of base metal (both up by 27 million euros) and the biggest decrease in the imports of mineral products (down by 22 million euros).

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Electricity production from renewable sources increased by 8%

According to Statistics Estonia, in 2018, the production of electricity totalled 12 terawatt hours, which is 6% less than in the previous year. Electricity production from renewable sources increased by 8%.

The decrease in electricity production in 2018 was influenced by lower consumption of oil shale in power plants. At the same time, the share of imported electricity increased. Imports from the Nordic countries increased by nearly 60%, accounting for 98% of total electricity imports. Electricity production was still greater than consumption, or the electricity balance was in surplus. Electricity exports remained at the level of 2017. Exports to Latvia accounted for nearly 80% of the total exports. Domestic electricity consumption remained stable, increasing by 3% year-on-year.

Electricity production from renewable sources has been increasing year after year. In 2018, compared to 2017, there was an 8% increase. Wind power production, accounting for almost a third of the production of renewable energy, decreased 12% year-on-year. The production of electricity from wood fuels and other renewable sources increased significantly (22%).

In 2018, the production of oil shale was nearly 22 million tonnes similarly to the previous year. The majority of oil shale is consumed in power plants and as raw material for shale oil. Shale oil production was 1.1 million tonnes, which is 9% more than in the previous year. Most of the production was exported; the main destination countries were the Netherlands, the United Kingdom and Denmark.

The production of wood pellets, which have found a place as an important type of fuel on the energy market, continues to grow. In 2018, nearly 1.3 million tonnes of wood pellets were produced, which is more than 15% increase compared to the previous year. Due to foreign demand, most of the production was exported. The main destination countries were Denmark (54%), the United Kingdom (14%) and Germany (14%).

For domestic consumption purposes, in 2018, natural gas, liquid fuels, coal and coke were imported. Natural gas was imported in the volume of 500 million m3, which is at the same level compared to 2017. Domestic consumption of motor gasoline decreased by 2% and consumption of diesel fuel by 4%.

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Economic growth is still strong despite weakened foreign demand

In the second quarter of 2019, Estonian GDP growth slowed to 3.6% y/y in real terms and to 7.9% y/y in nominal terms. In the first half of this year, GDP growth was 4.2% in real terms. Although, the growth moderated from the last year’s heights, it was still strong despite weakened foreign demand. Seasonally and working day adjusted GDP grew by 0.4% q/q.

Statistics Estonia revised the national accounts time series for 1995–2019Q1. According to the revised data, in the first quarter of this year, real GDP growth was 0.5 pp higher – 5.0%. As a result of the revision, GDP for 2017 was revised up by 0.9 pp to 5.7% and for 2018 – by 0.9 pp to 4.8%.

Economic growth was dominated by ICT sector

In the second quarter of 2019, the main contribution to GDP growth came from ICT – almost half of the growth came from this sector. Higher contribution came also from professional and technical activities, wholesale and retail trade, and manufacturing. Manufacturing, which was the main contributor in the first quarter, contributed less in the second quarter. However, slower growth of manufacturing sector was expected due to weakened foreign demand and faltering industrial confidence. Construction sector, that was the main contributor to the economic growth in previous years, did not contribute in the first half of this year. Negative impact to the growth came mainly from energy sector.

Domestic demand is still strong

In the second quarter, the growth of domestic demand decelerated somewhat, but was still very strong – 6%. The main contribution came from investments, which increased by 25%. Investments of business sector and households’ increased, while government investments decreased. The growth of private consumption has slowed and was 1% in the second quarter, which was affected by last year’s base effect. However, private consumption should be supported by strong wage growth, low interest rates, moderate inflation and high consumer confidence going forward.

The growth of foreign demand has slid from the peak. However, in the first half of the year, the growth of export of goods was still strong – 7%. Total export growth was 4% in the first half of the year. We expect that weakened foreign demand should offer less export opportunities in the second half of the year.

Economic growth in Estonia is expected to slow

According to our latest Swedbank Economic Outlook published in August, economic growth in Estonia is expected to decelerate in the second half of this year, primarily due to unfavourable foreign demand. We also expect slower economic growth in the next two years. As our August forecast was made before the revision of the GDP time series, we shall revise our forecast in our next economic outlook in autumn.

Source: Swedbank