Estonian industrial production increased in 2016

According to the preliminary data of Statistics Estonia, in 2016, the production of industrial enterprises rose 2% compared to the previous year. Production increased in energy and in manufacturing, but decreased in mining.

Whereas at the beginning of 2016, the production in manufacturing experienced a fall and a rise, since September the volume of production compared to the same month of the previous year increased steadily. In 2016, the total production in manufacturing was 2% higher than in 2015. In more than two thirds of the branches of industry production surpassed the volume of the previous year. The growth in the production of manufacturing was positively influenced by the branches with larger shares: manufacture of wood products increased 6%, manufacture of electrical equipment 14%, manufacture of furniture 4%, manufacture of textiles 13%. The growth in the production of manufacturing was negatively influenced by the manufacture of electronic, metal and chemical products, where production decreased.

In 2016, export sales as well as sales on the domestic market rose about 2% compared to 2015. 69% of the whole production of manufacturing was sold on the external market.

In December 2016, the working-day adjusted industrial production increased 10% compared to December 2015; the production of manufacturing rose 8%. In December 2016 compared to December 2015, the production of electricity increased by 22% and the production of heat by 17%.

In December 2016 compared to November, the seasonally adjusted industrial production decreased 1%; the production of manufacturing increased 1%.Volume index of production in manufacturing

Read more from Statistics Estonia

The turnover of retail trade enterprises grew in December

According to Statistics Estonia, in December 2016, compared to December 2015, the turnover of retail trade enterprises increased 3% at constant prices.

In December 2016, the turnover of retail trade enterprises was 619.4 million euros.

The turnover of stores selling manufactured goods increased 9% compared to December 2015. Turnover increased in all economic activities. Turnover grew the most in stores selling via mail order or the Internet, with sales increasing 31% during the year. A higher-than-average increase in turnover occurred also in stores selling pharmaceutical goods and cosmetics (12% growth) and in stores selling second-hand goods and in non-store retail sale (stalls, markets, direct sale (11% growth).

The turnover of grocery stores has been stable in recent months. In December, the turnover of these stores stayed at the same level as in December 2015.

The turnover of enterprises engaging in the retail sales of automotive fuel, which recovered slightly in November, again turned to fall in December and decreased 7% compared to December 2015. The turnover fall in these enterprises was influenced by the considerable acceleration in the price increase of automotive fuel in December.

Compared to November 2016, in December, the turnover of retail trade enterprises increased 15%. This is a usual rise in December, when the Christmas and turn-of-the-year sales take place.

According to preliminary data, the turnover of retail trade enterprises was 6.3 billion euros in 2016. Compared to 2015, the turnover increased 4%.

Turnover volume index of retail trade enterprises and its trend

In 2016, to publish monthly statistics on retail trade, Statistics Estonia started to use only the VAT declaration data of the Estonian Tax and Customs Board and stopped data collection with the questionnaire “Turnover”. This will reduce the response burden of entrepreneurs and Statistics Estonia’s expenditure on data collection, and increase the use of administrative data. Due to the change in the data source, the monthly news release “Retail trade” will focus on theturnover of retail trade enterprises, instead of the retail sales of such enterprises. Statistics Estonia will continue publishing the retail sales indicator of retail trade enterprises on a quarterly and yearly basis. Statistics Estonia published the monthly summary in five working days.

Source: Statistics Estonia

Last year’s cereal production was the lowest in five years

According to the preliminary data of Statistics Estonia, cereal production was 934,100 tonnes in 2016, which is the lowest yield of the previous five years.

Total cereal production included 455,500 tonnes of wheat, 357,400 tonnes of barley and 32,400 tonnes of rye. The average yield per hectare was 2,658 kilograms of cereals, whereas the average yield for wheat was 2,769 kilograms, for barley 2,641 kilograms and for rye 2,616 kilograms.

In 2016, the sown area of cereals was very close to that of the previous year. Cereals were grown on a total of 351,400 hectares, which is 0.3% more than in the previous year. The sown area of wheat was 164,500 hectares, which is 3% less than in the previous year. The sown area of barley increased by 3% and amounted to 135,300 hectares in 2016. The sown area of rye decreased by 13% and amounted to 12,400 hectares.

The production of legumes was 109,500 tonnes, which is 27% more than in 2015. The average yield was 1,975 kilograms of legumes per hectare. Legumes were sown on 55,400 hectares, which is 77% more than the year before and also the largest sown area of legumes ever.

The yield of rape and turnip rape seed was 102,500 tonnes. In 2016, rape and turnip rape were sown on 70,100 hectares. The average yield was 1,462 kilograms of rape and turnip rape seed per hectare.

The production of potatoes amounted to 89,800 tonnes, which is 23% less than the year before. The sown area of potatoes was 5,600 hectares in 2016. The average yield of potatoes was 15,920 kilograms per hectare.

Source: Statistics Estonia

The construction price index fell in 2016

According to Statistics Estonia, in 2016, the construction price index fell 0.8% compared with the average of 2015.

Compared to 2015, labour costs increased by 1.2%, the cost of machines decreased by 1.1% and the cost of materials decreased by 1.8%.

In the 4th quarter of 2016 compared to the 3rd quarter, the change of the construction price index was 0.2%, and compared to the 4th quarter of 2015 the change was -0.5%. Compared to the 3rd quarter of 2016, the index was mainly influenced by an increase in labour costs, which contributed more than half of the quarterly change. Compared to the 4th quarter of 2015, the construction price index was mainly influenced by the depreciation of building materials, which accounted for more than 75% of the total decrease.

The repair and reconstruction work price index decreased by 0.9% in 2016 compared to the average of 2015. Labour costs increased by 0.8%, the cost of machines decreased by 1.6% and the cost of building materials decreased by 2.1%.

The change of the repair and reconstruction work price index in the 4th quarter of 2016 was 0.3% compared to the 3rd quarter and -0.4% compared to the 4th quarter of 2015.

The calculation of the construction price index covers four groups of buildings: detached houses, apartment buildings, industrial buildings and office buildings. The repair and reconstruction work price index covers office buildings. The construction price index expresses the change in the cost of construction at the level of direct costs at a construction site. The resources taken into account in direct costs are divided into three main groups: labour force, building machines and building materials.

Change in the construction price index, 4th quarter 2016
3rd quarter 2016 – 4th quarter 2016, % 4th quarter 2015 – 4th quarter 2016, %
TOTAL 0.2 -0.5
labour force 0.3 0.3
building machines 0.4 0.0
building materials 0.1 -1.0
Index of detached houses 0.2 -0.1
Index of apartment buildings 0.2 -0.2
Index of industrial buildings 0.2 -0.5
Index of office buildings 0.1 -0.6
Change in the repair and reconstruction work price index, 4th quarter 2016
3rd quarter 2016 – 4th quarter 2016, % 4th quarter 2015 – 4th quarter 2016, %
TOTAL 0.3 -0.4
labour force 0.3 0.2
building machines 0.1 0.1
building materials 0.3 -0.9

For the statistical activity “Construction price index”, 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 this statistical activity.

Source: Statistics Estonia

The population of Estonia increased in 2016

According to the initial estimates of Statistics Estonia, the population number of Estonia as at 1 January 2017 was 1,317,800, which is 1,850 persons more than at the same time a year ago.

The population decreased by 1,370 due to negative natural increase (the number of deaths exceeded the number of births) and increased by 3,220 due to positive net migration (more persons immigrated to Estonia than emigrated). In total, the population of Estonia increased by 0.14% in 2016. The population of Estonia has increased for two years already, because immigration has been higher than emigration and negative natural increase.

More than 13,900 children were born in Estonia in 2016. The number of births has remained at approximately the same level for five years. Considering that the number of women in childbearing age has decreased, it could be seen as good news, but there is still a long way to go before really good news in births statistics.

There were 15,300 deaths in 2016. The number of deaths has remained at this level for six years in a row, varying by just +/-150. As the population is ageing and the number of older people increases year after year, it is expected that life expectancy will continue to increase.

In 2016, there were 9,100 persons who immigrated to Estonia and 5,800 persons who emigrated. Migration statistics are most difficult to estimate based on preliminary data, as Statistics Estonia supplements migration figures with data from additional registers and later also adds unregistered migration according to the methodology of calculating population based on residency index: if a person changes from resident to non-resident, it is emigration, and in the contrary case, it is immigration (if it is not births or deaths). Reaching the final result is more complicated compared to other events, both technically and methodologically, and can significantly increase migration flows. Emigration increases mainly due to unregistered leaving of European Union and Estonian citizens. Immigration increases mainly due to return migration of Estonian citizens, which is also not registered, as the prior leaving was not registered. Compared to immigration, emigration is less registered knowingly or unknowingly, and therefore, emigration increases presumably more than immigration in the revised population number.

Population change, 2000–2016

The current outcome is based on changes of residence in the population register in 2016 – persons whose residence was not Estonia at the previous year-end but was so at this year-end are considered immigrants, and the persons whose residence was Estonia at the previous year-end but not at this year-end are considered emigrants.

Source: Statistics Estonia

Prices increased by 0.1 pct in 2016

Consumer price index increased by 0.1% in 2016. Higher excise taxes on alcohol, tobacco, and motor fuels contributed positively, while cheaper energy had the biggest negative impact on prices. The prices of alcoholic beverages and tobacco were around 6% higher than in 2015.

Heat energy were 9%, pipeline gas 20%, and motor fuels 4% cheaper than in 2015. Nevertheless, due to a gradual rise in oil prices since January 2016, and a hike in excise taxes in February 2016, the prices of motor fuels have started to rise. In December 2016, gasoline and diesel prices were already 16% higher than one year before.

In 2017, inflation in Estonia is expected to accelerate to around 3%, due to more expensive commodities, and new rounds of excise tax hikes on alcohol, tobacco, and fuels. In 2014-2016 average price level remained flat in Estonia, prices increased last time in 2013 (+2.8%).

Source: Swedbank

EIB provides EUR 400m to support strategic investments in Estonia

The European Investment Bank (EIB) and the Estonian Ministry of Finance have signed the second tranche – worth EUR 400 million – of the co-financing facility for Estonia to support investments in research and innovation, sustainable transport infrastructure, and promoting the development of SMEs. This loan from the Bank will help Estonia in the successful absorption of the EU structural funds over 2014 – 2020, the first EUR 200 million tranche of the facility was signed in December 2014.

Sven Sester, Minister of Finance of Estonia, said: „The Estonian government has decided to increase investments in order to improve the competitiveness of the Estonian economy. There is no doubt that EU structural funds have a positive impact on the Estonian economy. In order to support investments that improve competitiveness and bring long-term benefits, we are prepared to use external financing. Loans will not be used to cover running costs, such as paying wages or allowances. The government is firm in our determination to adhere to European budget rules that rule out unsustainable deficits.”

Jan Vapaavuori, EIB Vice-President responsible for lending in Estonia, said: “The EIB has always been a reliable partner for Estonia. We are pleased to now be able to continue our close cooperation with the Estonian authorities with this second and last tranche of the co-financing facility. The combined use of EIB loan and EU grant money supports sustainable economic growth and helps further improve the quality of life for the people of Estonia.”

The EUR 400 million loan will be available as a co-financing for selected projects under the Estonian operational programme for the Cohesion Policy Funds and the Rural Development Programme for 2014 – 2020. The EU structural funds will meet a fixed percentage of the costs of eligible projects, with the remaining part being covered from the State Budget or by drawing on this facility from the EIB. It will primarily support projects in the following sectors: research, technological development and innovations; transport, water and environmental protection, as well as infrastructure development in rural areas.

The facility will furthermore focus on investments in education, and health-care, as well as in improving training and access to employment. These investments will contribute to the further development of a knowledge-intensive and internationally competitive economy, a clean environment and a sustainable transport infrastructure, which in turn will help to create the conditions for smart, sustainable and inclusive growth.

This loan is a continuation of the long-standing partnership between the EIB and Estonia, with the Bank of the European Union having already lent EUR 550m within a similar EU funds co-financing facility covering the period from 2007 up to 2013. To obtain an EU grant for an eligible project, the (Estonian) government must provide the co-funding. While in a large part the co-funding will be provided from budget funds, the EIB facility will be available to supplement these funds and to ensure that Estonia uses as much of the available EU funding as it can.

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2011-2015, the EIB provided loans in Estonia totalling nearly EUR 740 million.

Source: Estonian Ministry of Finance