"Aktuaalne kaamera" reported a drop in hiring and firing in both public and private sectors.

Employment in the industrial sector, hit hardest by the economic downturn, fell by nearly 7 percent, but began to recover slightly by year's end.

Meanwhile, employment continued to decline in other sectors, including construction and retail.

Coop, Estonia's largest retail chain, which employs 6,000 people, had to close some stores last year.

Coop's HR director Kerstin Jaani told "Aktuaalne kaamera": "Any company that wants to survive must find solutions today to remain viable in the future. Technology and smarter solutions are key, but that will also lead to some reduction. However, we can't say that Coop has significantly cut its staff: Looking at our numbers, there hasn't been a noticeable fall in employee count."

Construction volumes fell by 7 percent last year. The situation is toughest in infrastructure construction, where, instead of major highway projects, workers are mostly employed on Rail Baltica construction.

Tarmo Trei, head of the Estonian Infrastructure Construction Association (ESTEL), said: "Our membership saw a 3 percent drop in staff numbers last year; we feared it might be worse. In some subfields, the workforce fell. The tarmac industry took a major hit: In previous years, over 1.6 million tons of asphalt mix were produced in Estonia, but last year's figure fell below one million tons."

Bank of Estonia economist Orsolya Soosaar said there's no clear trend of improvement in employment expectations, except for the industrial sector, which is looking up.

Soosaar said: "There's been a shift in manufacturing, where employment expectations have risen to historic average levels. In retail, expectations are low, which makes sense — although private consumption is rising, local retail turnover has suffered."

Overall, the labor market was stable last year as the economy began recovering mid-year.

According to tax declarations, the number of waged workers declined, due to slower hiring in the public sector and lower turnover in the private sector. In other words, many companies, hoping for better times ahead, chose not to let go of employees.

Soosaar noted: "Past experience has taught companies that, in the long run, the economy tends to face labor shortages, so laying off workers can make it expensive and difficult to rehire them later."

The unemployment rate in Estonia stood at 7.4 percent at the end of last year, though it is expected to improve, albeit slowly, in the coming years.

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