1.
Flash comment: Estonia
Economic commentary by Economic Research Department Nov 14, 2011
Rapid employment growth continued in 3Q
Labour market indicators According to Statistics Estonia, employment grew by strong
20% 70% 8.6% yoy in 3Q. The activity rate, which has already been very
high, climbed further up to 68.4%. Similarly to 2Q, there were
15% probably seasonal factors affecting the labour market data in 3Q as
well – more employment occurs during summer months in
10%
65% agriculture, retail, construction and services sectors. This is
5% supported by rapidly growing youth employment (20.2% yoy in 3Q)
which most likely is a temporary trend during the summer period as
0% students will return to their studies during autumn.
2004
2005
2006
2007
2008
2009
2010
2011
60%
-5% The unemployment rate fell to 10.9% in 3Q. The lowest rate was
observed among 50-74 year-olds (8.2%). Despite rapid
-10%
Unemployment rate
employment growth among youth, their unemployment rate is still
-15%
Employment, annual grow th
55%
the highest (22.2%). While during the previous two years
Activity rate (rs)
unemployment has been higher among men, their unemployment
rate declined to lower levels compared to women in 3Q – similar
Unemployment rate by duration
trend was observed in all 3Q during pre-crisis years in 2002-2006.
8% > 24 months
12-23 months
6-11 months Fastest employment growth was reported in ICT (83% yoy),
7% < 6 months followed by transport and storage (24%), and construction (27%).
6% Strong employment growth in construction, which has climbed back
5% to levels seen in 2005/2006, is founded on increased investments
in both private and public sector. The latter is affected by
4%
successful CO2-quota sales by the state; earned revenues will be
3% mostly invested into increasing energy efficiency of buildings.
2% Employment growth continued also in the biggest economic sector
– manufacturing – with 9% yoy in 3Q.
1%
0%
We expect job creation and employment growth to continue in
2007 2008 2009 2010 2011 coming quarters but with a considerably slower pace. The biggest
challenge remains with skills mis-match, i.e. despite high number of
unemployed there is a lack of workers with necessary
Unemployment rate by gender
qualifications. In addition, the number of long-term unemployed is
30%
Women continuously on the rise (43% yoy in 3Q among those without work
Men for two years and longer); their return to employment, however, is
25%
increasingly complicated as work habits, social skills and
20% qualifications erode. This in turn poses social risks and weights on
the entire society.
15%
10%
5%
Annika Paabut
0%
2006 2007 2008 2009 2010 2011 Acting Chief Economist
+ 372 6 135 440
annika.paabut@swedbank.ee
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