Elcoteq to halt Estonian expansions

Estonia's growing labour shortage has already hit the area of communications equipment. Elcoteq, which is Estonia's largest exporter, has often complained about difficulties in recruiting skilled labour. Although Elcoteq denies that it has any intention of shifting its activities away from Estonia, the company has now stopped expanding production in its Estonian plants. And as Estonia strives to move up the value chain employment in wage-sensitive industries - such as textiles and leather goods - has been in decline for some years now, with even domestic firms moving production to cheaper locations abroad. Another evident by-product of the growing labour scarcity is the rate of annual increase in monthly salaries, which is now in the 12 - 14% range. Click here for the full report.