Market research Estonia

PMR Research is a specialised custom market research unit of PMR Ltd., a British-American company based in Poland. We offer a wide range of research services in Central and Eastern Europe for companies interested in business over the countries in the region.

Research services provided by PMR Research in Estonia include:

brand and company image studies
research on customer preferences, their satisfaction and their purchasing habits
product concept tests
usage & attitude studies
internet surveys
quantitative surveys - telephone, CATI, face-to-face
qualitative research - focus groups, IDIs
industry analyses (comprehensive analyses of given market sectors performed using PMR's proprietary methodology PMR MarketInsight)
preparation of databases
fieldwork services

Why to invest?

Currency pegged to the Euro
Stable political environment
Third GDP per capita in the region
Ranked 12th in the Economic Freedom Index 2007
Developed telecommunication infrastructure
Balanced state budget
Innovative economy
Low bureaucracy level
E-government already introduced

Business and economical environment

Estonia has a modern, market-based economy, including strong cooperation with western countries. It benefits most of all from strong electronics and information technology (IT) sectors and is greatly influenced by development in Finland, Sweden and Germany, three major trading partners. The Estonian economy is growing quickly, on one hand because of Scandinavian companies that relocate their routine operations to Estonia, and on the other due to Russian oil transit using Estonian ports. Estonia is nearly energy independent, supplying over 90% of its electricity needs with locally mined oil shale. Alternative energy sources such as wood, peat, and biomass make up approximately 9% of primary energy production.
The industries in Estonia that play a significant role in the economy are engineering, electronics, wood and wood products, textiles, information technology and telecommunications. Agriculture in contrast makes up for only 3.2% of GDP. The most common agricultural products include potatoes, vegetables, fish livestock and dairy products.

Estonia has not yet adopted the euro as its currency. As part of the preparations to join the Eurozone, Estonia is a member of the Exchange Rate Mechanism II (ERM II) and will join the zone once it fulfils the necessary conditions of the 'Maastricht' convergence criteria.

Estonia has followed Denmark in the 2008 as the second EU country to slide into a recession, and it is the first in CEE as the real GDP has declined by 3.5% that year. As the credit availability has decreased substantially it is forecasted that the slow down will continue throughout 2009 and 2010 resulting in further decrease in GDP by -10.1% and -1.5% respectively.

Estonia having tiny domestic market focuses on selling its products to customers abroad. Major exports embraces machinery and equipment (33% of all exports annually), wood and paper (15%), textiles (14%), food products (8%), furniture (7%), and metals and chemical products. On the other hand Estonia imports machinery and equipment (33.5% of all imports annually), chemical products (11.6%), textiles (10.3%), food products (9.4%), and transportation equipment (8.9%). What is interesting Estonia also exports 1.562 billion kWh of electricity annually. In 2008, Estonian exports reached the level of EUR 7.9bn f.o.b, while imports amounted to EUR 10.52bn f.o.b. facing a 1.1% and 7.9% decrease respectively in comparison with the previous year.

However, it must be emphasized that the economical crisis in Estonia comes after a few years of unusually strong growth of GDP reaching 8.22% annually on average in the 2000 – 2007 period and in 2006 hitting 10.38%. This gives hope that if wisely driven through the rough crisis times Estonia may strongly recover in the next 5 to 10 years perspective.

The unemployment rates in Estonia has been recorded on the level close to the natural unemployment rate until 2008, however, in the current economic turmoil are not possible to be further capped so low. Hence, the recent forecasts indicate growth in the number of Estonians being without work reflected in the rates of 9.5% and 11.9% in 2009 and 2010.

It must be also emphasized that in 2008 Estonia has faced a strong increase in the inflation rate which crossed the 10% threshold amounting at the 10.4% (compared with 6.6% in 2007 and 4.4% in 2006). However, as economy decreases inflation forecasts for 2009 and 2010 are 1.4% and 1.6% respectively.

Social environment

Estonia is a multinational country where, according to the 2000 census, altogether 109 languages are spoken. 83.4% of Estonian citizens speak Estonian as their mother tongue, 15.3% – Russian and 1% speaks other languages. 83.6% of Estonian residents are Estonian citizens, 7.4% are citizens of other countries and 9% are "citizens with undetermined citizenship". What is interesting is that the number of Estonian citizens who have become citizens through naturalization process (over 140,000 persons) exceeds the number of residents of undetermined citizenship (about 120,000 persons). Proximity to Scandinavia and affinity to Finland influenced the Estonian success and encouraged many investments.
There is only one Nationality Holiday in Estonia celebrated on the 24 February being the Independence Day of Estonia, being a day free from work. In general there are 12 State Holidays celebrated in the country.
The Estonian educational system is made of state, municipal, public and private institutions. There are currently approximately 590 schools in Estonia, public and private universities constitute a moderate number. The largest public universities are Tartu University, Tallinn University of Technology, Tallinn University, Estonian University of Life Sciences, Estonian Academy of Arts, and the largest private university is Estonian Business School.

Infrastructure and technological environment

The railway infrastructure in 2006 in Estonia was only 986 km and the highway length amounted 56,856 km. There are 19 airports of which 12 are paved. Furthermore with population of 1.34 million in 2008, Estonia had about 1.7 million cellular telephones, 0.5 million fixed phones, and 0.8 million of internet users.

According to Statistics Estonia, during years 2001–2007 the average growth rate of the research and development intensity for Estonia amounted to 8%, which is the second best position among the European Union countries.

In the terms of energy production Estonia is a dependent country. However, given many ongoing investments in renewable energy, the importance of wind power has been growing in Estonia. The total amount of wind energy production is Estonia is now almost 60 MW. At the same time roughly 399 MW projects are in the pipeline and more than 2800 MW worth of projects are being proposed. There are also plans to build new power stations that provide higher efficiency in oil shale based energy production. Before 2009, the Estonian energy market shall be liberalized. For the non-household market, constituting 77% of consumption, it will be completed before 2013. Estonia plans to apply nuclear power for its oil shale production.

Political environment

Estonia is a parliamentary democracy with unicameral Parliament. Executive power is in hands of the President, who is elected for five years. Estonia has joined both NATO and the European Union in the spring of 2004.

Estonia's liberal foreign trade regime, which contains few tariff or non-tariff barriers, is nearly unique in Europe. The country’s national currency is also freely convertible at a fixed exchange rate and follows conservative fiscal and monetary policies. Estonia has free trade regimes with European Union, EFTA countries and Ukraine. The upcoming elections to Euro parliament are held on 7 June 2009, whereas the local/municipal are on 18 October 2009.

General data

Area: 45,226 sq km
Population: 1.34m (2008)
Capital city: Tallinn
Language: Estonian (official), Russian, Ukrainian, Finnish, other
Ethnic groups: Estonian 68.6%, Russian 25.6%, Ukrainian 2.1%, Belarusian 1.2%, Finn 0.8%, other 1.5% (2007)
Land boundaries: Latvia, Russia

Major economic indicators

	2006	2007	2008	2009f	2010f
GDP (EUR bn)	13.1	15.3	15.9	14.7	14.9
Population (mn)	1.3	1.3	1.3	1.3	1.3
GDP per capita (EUR)	9,745	11,379	11,842	10,983	11,187
GDP (constant prices y-o-y %)	10.4	6.3	-3.5	-10.1	-1.5
Exports, real, y-o-y (%)	11.6	0	-1.1	-5.5	-1.8
Imports, real, y-o-y (%)	20.4	4.2	-7.9	-6.7	-3.4
CPI (average, y-o-y %)	4.4	6.6	10.4	1.4	1.6
Monthly wage, nominal (EUR)	601	725	819	803	811
Unemployment rate (%)	5.9	4.7	4.9	9.5	11.9
Net FDI (EUR bn)	0.5	0.8	0.6	0.3	0.2
FDI % GDP	4.2	5.3	3.7	2.0	1.2
FX reserves (EUR bn)	2.1	2.2	2.8	2.3	2.0
Exchange rate to USD AVG	12.45	11.41	10.64	12.06	11.90
Exchange rate to EUR AVG	15.65	15.65	15.65	15.65	15.65

Last update: Q2 2009

Useful data

Currency: Estonian kroon (EEK)
Time zone: GMT +2
Area code: +372

If you would like to find out more on the Estonian market opportunities please do not hesitate to contact us directly:
phone: (48 12) 618 90 80
faks (48 12) 618 90 08
e-mail: [email protected]

PMR Business Solutions in Estonia

Estonia market reports
To purchase or find detailed information on PMR Publications reports covering the general economy, construction, retail, pharmaceutical, and ICT sectors in Estonia.

If you are looking for greater detail trust our research and consulting divisions to carry out projects tailored to your business needs.

Estonia market research
PMR Research offers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation and sector analyses.

Estonia consulting
PMR Consulting offers a wide range of consulting services in Central and Eastern Europe for foreign companies interested in the region. The typical projects include: competitive intelligence, sourcing, strategic advisory, consulting at foreign direct investments and mergers & acquisitions.