The economic optimism of small-sized enterprises in Western Estonia follows in the footsteps of the rest of Estonia
The small and medium-sized enterprises (SMEs) in Western Estonia have a positive outlook on the current economic year and only a few estimate a decrease in turnover, as shown by the Baltic Business Outlook survey conducted by SEB.
“94% of SMEs in Pärnu, Lääne, Saare and Hiiu counties estimate an increase in turnover; furthermore, 12% of the respondents expect the increase to exceed 15 per cent. Just 6% expect a decrease in turnover, which is in line with the average indicator of Estonia,” said Ainar Leppänen, Head of Retail Banking at SEB.
According to Leppänen, the willingness to export of enterprises in Western Estonia is still below average – 82% envisage operating solely in the domestic market, 73% being the Estonian average in this regard. 7% of SMEs in Western Estonia intend to enter new export markets and 11% intend to expand on current export markets.
The investment plans of enterprises in Western Estonia have not changed a great deal in recent years; 10% of them intend to make investments exceeding 50,000 euros, which is just slightly lower than the Estonian average (12%). 39% of respondents were still unsure as to whether they will be making investments in the current year and in what volume.
The most foreign labour in Pärnu County, Hiiu County interested in innovation
In Western Estonia, 16% of enterprises intend to hire new employees and 3% intend to decrease their number of employees which, similarly to the Estonian average indicators, is a sign of stability of the labour market. The SMEs of Pärnu County have hired foreign workers the most (6%) among the counties of Western Estonia, and a total of 14% of SMEs in the region are interested in hiring foreign workforce.
The innovation readiness of Western Estonia is near the Estonian average at 51%, however, Hiiu County (67%) stands out from the rest in this regard. 13% of the enterprises in Pärnu County intend to change their business model, which leaves the county in second place behind Ida-Viru County (23%) in this regard.
46% of the enterprises in Hiiu, Saare, Lääne and Pärnu counties consider digitising to be relatively important or very important, and only 23% responded that digitising is not important for them. 25% of SMEs in Western Estonia offer their customers the possibility to purchase their products and services on the internet, and 15% said that digital sales constitute more than 71% of their total turnover. 35% responded that digital sales constitute less than 10% of their total turnover.
In 2018, economic growth in the Baltic states was among the fastest in Europe and the growth of wages and domestic demand has significantly increased the sense of security for Estonian, Latvian and Lithuanian SMEs for the current financial year.
The biggest optimists are Estonian SMEs, 92% of whom are expecting turnover growth, which is the highest number in five years. The relevant proportion in Latvia is 89% and 87% in Lithuania, so SMEs afraid of a decline in turnover have decreased to 10%, depending on the country.
This is the seventh consecutive year that SEB Group has organised the Baltic Business Outlook Survey, mapping the expectations of Baltic small and medium-sized enterprises (SMEs) for the current financial year. Nearly 4500 SMEs responded to the Baltic survey, which was conducted last December. 337 enterprises from Hiiu, Saare, Lääne and Pärnu counties took part in the survey.
More information:
Evelin Allas
Communications Manager
SEB
Phone +372 665 5649
Mobile +372 511 1718
Address Tornimäe 2, 15010 Tallinn
E-mail evelin.allas@seb.ee
