Economic growth decelerated in the 1st quarter

The seasonally and working-day adjusted GDP increased by 0.3% compared to the 4th quarter of 2011 and 3.7% compared to the 1st quarter of 2011.

Compared to the period preceding the economic recession the seasonally and working-day adjusted GDP in the 1st quarter of the current year had arisen to the level of the 1st–2nd quarter of 2008 in nominal terms and approximately to the level of the 2nd quarter of 2006 in real terms.

In the 1st quarter, the fast growth of the value added in construction, trade, information and communication activities contributed the most to the GDP growth. The growth in construction was supported mainly by the repair and reconstruction work of buildings. The fast growth of information technology and telecommunication services had the biggest impact on the growth of the value added of information and communication. Retail trade contributed the most to the GDP growth in trade activities.

The value added decreased in manufacturing, real estate activities and in health care. The decrease in the production of computers, electronic and optical products inhibited the GDP growth the most.

Growth of the value added of economic activities, 1st quarter 2012

Export growth of goods and services decelerated to 7%, with the export growth of goods also decelerating to 7%. Import of goods and services increased by 10%, with import of goods growing by 9% and import of services by 14%. If earlier Estonian foreign trade was mainly influenced by the fast growth of import and export of computers, electronic and optical products, the growth of these goods was replaced by a decrease since the last quarter of the previous year and other machinery and equipment have now the biggest contribution. Export of services increased 6%, contributed mainly by the services of professional, scientific and technical activities and services of warehousing and support activities for transportation. Import of services was influenced the most by the fast growth of construction services. In spite of the deceleration of export and import, their share in the GDP increased to the level of 92% and 93%, respectively. The share of import of services increased especially fast. The share of net exports in the GDP was -0.5%. Import exceeded export last in 2008.

In the 1st quarter the GDP both at current and constant prices increased faster than the amount of hours worked compared to the same quarter of the previous year – by 5% in nominal terms and by 2% in real terms. The growth of labour productivity per hour worked was the fastest of the previous one and a half year. At the same time labour costs for the GDP production have increased. Unit labour costs have increased by 4% compared to the same quarter of the previous year, which indicates that the compensations per employee have grown faster than productivity. The growth of the unit labour costs was the fastest of the previous two and a half years.

The growth of the domestic demand decelerated to 1.6% on account of the deceleration of the increase in business sector inventories and of the deceleration of the growth of gross fixed capital formation. Gross fixed capital formation grew by 17%, primarily due to business sector investments in machinery and equipment and to the government sector investments in buildings and structures. Household final consumption expenditures increased by 3%. The increase in the purchase of vehicles and consumption of telephone services had the biggest contribution to the growth. The domestic demand was continually smaller than the GDP by output approach.