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"The 8% decline in total profits of the business sector in the third quarter was below our expectations. Although the profits of several areas of activity experienced a decline - 41 out of 64 areas of activity –  the 53% decline of wholesales had the biggest impact on the sector. Road transport and real estate companies' profits also experienced a strong decline," Mertsina was quoted by spokespeople as saying.

"At the same time the profits of agriculture, manufacturing, construction and the ICT sector saw strong growth. The profits of real estate enterprises have declined for already seven quarters in a row and the situation has even worsened in the past few quarters. One of the reasons behind a decrease in profits of real estate companies is the increase in construction investments and purchasing buildings this year," he added.

According to Mertsina, the investment volumes of companies were worse than expected and the share of investments in revenue fell to the lowest level in the past 16 years. "Although the investments of around a third of areas of activity declined, the biggest negative impact once again came from wholesale and road transport companies," the economist said.

The profitability of companies fell by 17% to the lowest level in the past six years and a continued acceleration in the growth of labor costs, Mertsina said. "While in the first two quarters of the year the revenue of the business sector grew faster than costs, in the third quarter the situation changed and the growth of costs exceeded revenue growth. Although this year the growth of labor expenses has accelerated, its share in revenue has started to decrease," he added.

By the end of the year the economic results of the business sector are still expected to improve. "Although the economic results of companies were weaker in the third quarter, their profits and investments have been quite volatile also in previous years. When we look at the whole year, the profits of the business sector have grown by 10%, investments by 18% and hourly productivity based on added value by 8%, which all in all is a great result and is substantially better than last year," Mertsina said.

In the third quarter of 2017, the total profit of the Estonian business sector was 787 million euros, which is 8% less than in the same period the year before, while sales increased 10% to 13.9 billion euros, Statistics Estonia reported on Tuesday.