Baltic Export, Employment, Estonia, Markets and Companies

"Our high labor expenses, expensive energy, increasing excise duties are reducing the competitive ability of the local industry," head of the confederation Toomas Tamsar told BNS. He added that although the people who are to be laid off will probably find new jobs, the fact that another company is taking its production away from Estonia is very worrying.

According to Tamsar the uncertainty of manufacturing is also shown by a recent study according to which about one in ten industrial companies is planning to reduce investments in the next six months.

More than half of Estonia's exports come from the manufacturing industry and about a fifth of employed people work in the manufacturing sector, Tamsar said. "Therefore we are expecting the government to make concrete steps toward strengthening the competitive ability of the Estonian manufacturing industry," he added.

According to Mihkel Nestor, economic analyst at SEB, layoffs will continue when salaries increase.

"Compared to 2010 the average salary has increased by a third which raises production expenses too high in simpler branches of manufacturing. It is quite certain that when salaries rise, more of such events will happen," Nestor told BNS.

PKC Eesti, Estonian arm of the listed Finnish manufacturer of cable harnesses for the automotive industry, on Thursday morning announced a plan to close its plant in the north Estonian city Keila next March and lay off 613 employees.