The growth in business sector is slowing down
According to Statistics Estonia, in the 2nd quarter of 2011, the net sales, costs and total profit of the business sector increased compared to the previous quarter as well as to the same quarter of the previous year. At the same time the continually improving comparison basis turns the growth rate slower.
In the 2nd quarter of 2011, enterprises sold goods and services for 10.5 billion euros at current prices, which is by a fifth more than in the same period a year ago. The net sales of wholesale and retail trade, manufacturing and transportation and storage enterprises, which have the biggest share in gross net sales in total business sector, increased 13%, 36% and 22%, respectively. At the same time the growth of net sales of these activities as well as total business sector slightly slowed down. The reason for the slowdown is continually improving comparison basis.
Also compared to the previous quarter, the growth in net has sales slowed down. According to the seasonally adjusted data, the net sales of enterprises increased by about 1% in the 2nd quarter of 2011 compared to the previous quarter. Last year and in the 1st quarter of 2011 the average growth compared to the previous quarter stayed around 4–6%. The economic sentiment indicator of the Estonian Institute of Economic Research which reflected enterprisers and consumers confidence, also showed a continuous falling trend since April.
Compared to the 2nd quarter of 2010, the enterprises’ total costs increased 16%, of which the personnel expenses 10%. Although the personnel expenses increased, it could not guarantee the growth of the real wages in all activities. The number of persons employed as well as the number of hours worked increased 4%. The growth of the productivity indicators (labour, hour and personnel cost productivity) continued in comparison with the same period of the previous year. The hour productivity (total productivity / number of hours worked) of business sector increased more than a fifth, at the same time the average hourly labour costs increased only 5%.
In the 2nd quarter of 2011, the total profit of enterprises amounted to 748 million euros, which was about 66% more compared to the 2nd quarter of the previous year and according to the seasonally adjusted data exceeded by 12% the profit of the 1st quarter of 2011. Compared to the 2nd quarter of the previous year, the total profit increased the most in construction. The growth was influenced by the low reference base in the previous year. Manufacturing gave a third of the total profit of the business sector. The 76% growth in this activity was mainly caused by increase in exports. The growth in manufacturing was mainly supported by the manufacture of electronic equipment, wood products and fuel oil products. Agricultural and education activities were in loss.
The increase in investments compared to the same quarter of the previous year has continued already for three quarters in succession. In the 2nd quarter 2011, enterprises invested 578 million euros, which is 71% more than in the 2nd quarter of 2010. Investments were mainly made in vehicles and in other equipment and machinery. Investments in the construction and alteration of buildings increased the most compared to the previous as well as the same quarter of the previous year. The major investors were manufacturing and energy enterprises with about a half of the total investments of enterprises.
Net sales, personnel expenses and total profit of the business sector, 1st quarter 2002 – 2nd quarter 2011 (average of the quarters of 2005 = 100)
