Survey: Estonian industry has recovered from crisis 'surprisingly fast'

The manufacturing sector remains one of the largest employers in Estonia (picture is illustrative).
The manufacturing sector remains one of the largest employers in Estonia (picture is illustrative). Source: Priit Mürk/ERR

Estonian manufacturing companies have left behind the crisis year, can see both turnover and profitability growing this year, and are planning to hire nearly 3,000 people, the results of a survey carried out by Swedbank in spring 2021 show.

Of the businesses surveyed by Swedbank in the latest survey of industrial companies, 76 percent expect profitability to increase or remain the same this year, 58 percent expect turnover to grow and 31 percent expect turnover to remain the same, Swedbank said.

The strongest growth in turnover in 2021 is expected in the wood industry, which is forecasting growth of 11.9 percent, while the remaining industrial sectors expect growth of around 5 percent.

"This year's survey revealed that industrial companies will continue to both make investments and conquer new export markets, which requires increasingly smarter production," said Raul Kirsimäe, head of Swedbank's industry division, adding that the industrial sector stands on a solid footing, which is why it managed to survive the crisis surprisingly well. 

However, the surveyed companies also estimate that impacts of the crisis will be felt also this year, with 71 percent of respondents saying that the price of inputs has moved up, 58 percent having witnessed supply problems and 49 percent having seen a temporary decline in orders. 

There were also problems with liquidity, lack of storage space and finding new supply partners. However, a quarter of the respondents pointed out that orders for this year increased instead due to the crisis.

"Instead of the health crisis that is shifting further into the background with each passing day, we can see local industries increasingly having concerns about security of supply, and instead of focusing on expansion opportunities, they need to address supply issues to keep production going," Kirsimäe said. 

The labor challenges for the industrial sector have not disappeared. On average, the industrial  sector is planning to increase its workforce by 2.4 percent this year, which will mean recruiting close to 3,000 new people, given the number of people employed in the sector.

At the same time, the coronavirus crisis has not made it easier for industrial companies to hire  workers, as the industrial sector is looking for people with different skills than of the workforce  made redundant mostly by the hospitality and food service sectors amid the coronavirus crisis.

"Considering that the industrial sector, as a stable employer, is planning a wage increase of between 1.2 and 4.3 percent, a full professional turnaround at last by some people is not impossible," Kirsimäe added. 

A total of 269 companies employing 25,053 people in total participated in the Swedbank survey of industrial enterprises conducted in March and April this year. The combined annual turnover of the companies surveyed is €3.73 billion.

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Editor: Helen Wright

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