Orsolya Soosaar, Eesti Pank, economist

Labour market indicators have reflected the impact of the uncertainty deriving from the external environment since the last quarter of 2011. The number of jobs mediated by the Estonian Unemployment Insurance fund has notably decreased. Based on the industrial indicator of the Estonian Institute of Economic Research, companies anticipating a shrinkage in employees are outnumbering those expecting a rise. According to Eesti Pank's estimate, this marked a quarter-on-quarter decline in seasonally adjusted terms.

Unemployment increased from 10.9% in the third quarter to 11.4% in the fourth quarter. This said, about 60% of the unemployed had been looking for a job for more than a year. This refers to the risk of high structural unemployment. Therefore, active labour market policies play an important role in maintaining and/or stepping up the qualifications of the unemployed.

Fourth-quarter unit labour costs remained broadly stable, according to preliminary estimates, so price pressures from the labour market did not strengthen. Future wage negotiations and personnel decisions should take account of heightened risks and the more adverse outlook. This will be necessary to help safeguard the competitiveness of companies and ensure that the public sector will meet it's fiscal balance goal.

Viljar Rääsk
Eesti Pank
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