OREANDA-NEWS. December 30, 2014. The research “Business Barometer 2015“ conducted by SEB in October and November has revealed that every fourth company in Harju County believes that they will increase turnover by 15% or more in the coming year. A quarter of the companies of Harju County is also planning to create new jobs.

The companies planning to increase their turnover at least 15% next year were classified as optimistic in the research. A research covering 3,000 small and medium-sized enterprises (SMEs) in Estonia revealed that average business optimism in Estonia has decreased from 25% to 20%.

While the research conducted a year ago showed that 32% of the companies of Harju County were optimistic, this year, the relevant percentage was 25%.

By sectors, trade and industry continue to be on an optimistic position, and the construction sector was added as well. Last year, it belonged into the most pessimistic sectors.

“The relatively high figure of business optimism among the companies of Harju County is largely caused by positive future prospects of trade and service sectors. Domestic consumption in Estonia has been on the top in the recent months due to low inflation and continuous salary pressure, and this is exactly a case proving the positive effect of domestic consumption on national economy of Estonia,” said Tonu Sepp, Head of North Division of SEB.

Export perspectives are stable, investment plans are decreasing

Compared to the previous year, the percentage of the companies of Harju County, who are planning to enter new or expand on the existing export markets, has remained on the same level: 38% last year, 36% this year. The strong faith of companies in Harju County in expanding on export markets keeps the average figure of Estonia high; however, in a year it has slightly decreased, from 31% to 28%.

Investment plans of the companies of Harju County have decreased. While 35% of the companies were planning to make investments exceeding 30,000 euros in 2014, only 14% of the companies of Harju County are planning similar investments for 2015. The average figure of investment plans of Estonian companies has fallen from 41% to 16% in a year. However, in Estonia there are still examples of business regions with active investments, such as Ida-Viru and Jarva Counties (already for the second consecutive year), where every fifth company is planning investments. Investment readiness is the lowest in Valga County, where only every tenth company is planning investments.

“The decreased investment figures are the correct reaction of entrepreneurship to fluctuating national and European economy. Taking account of other positive figures of the region, I believe that the coming year will be rather good for the most important business region in Estonia,” said Sepp.

A quarter of the companies in Harju County is planning to create new jobs; innovation becomes increasingly more important

The surveyed companies plan to create almost 1,500 new jobs in total in the coming year in Estonia. This is an unexpectedly high figure, taking account of the current economic situation. The number of planned new jobs is the highest in Ida-Viru County. Only 4% of Estonian companies expect a decrease in the number of employees.

In Harju County, 26% of companies is planning to employ new staff in 2015, which is higher than the average figure of Estonia (23%). During a year, the plans for creating new jobs have decreased in the average figures of Harju County, as well as Estonia (31% and 27%, respectively).

The number of Estonian companies planning innovation has increased from 59% to 73%. In Harju County, the numbers are similar: in the previous year 56%, and this year 74% of the companies responded that they are planning various innovations for the coming year.
35% of the Estonian companies is planning innovation of a product or service, 24% invests in the development of employees, and 11% plans to change their business model. In a year, the interest in innovation has essentially increased in the Estonian construction sector, which is planning to intensify training and development of employees. The most innovative field is still industry, where competition is tight and companies are operating extensively on export markets. Innovation plans are the smallest in agriculture.