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Analysis: Danish companies warm up for a strong 2018

Growth in sales, more jobs and increased investments. Expectations for 2018 are high among Danish companies, show the latest responses from DI’s business panel, where more than seven out of ten companies have increased optimism compared to last year.
Export markets will be one of the major growth drivers for Danish companies in 2018.

Publiceret: 10.01.2018
Af Uffe Hansen mail

“For the members of the Confederation of Danish Industry, forecasts for both turnover and employment in 2018 are looking bright. This supports our expectations for growth of about 2 per cent in the Danish economy,” says Director Kent Damsgaard, the Confederation of Danish Industry.

The conclusions in DI's business panel are based on 584 responses out of 2238 companies contacted.

It is particularly sales and employment that help boost expectations. Confidence is also high among smaller companies.

See also: The rubber duck effect and two other economic factors that will affect 2018

Exports help boost confidence

For 2018 overall, 70 per cent of companies expect increased turnover, while just 7 per cent expect a decline.

Export companies are particularly optimistic about 2018, where almost a quarter expects sales to increase by more than 10 per cent in 2018. Among the rest of the respondents, there is also significant optimism.

“Overall, there is greater confidence in the market prognoses than last year,” explains Kent Damsgaard.

The service industry looks particularly bright in Denmark, where every third company expects increased employment - double as many as in the beginning of 2017.

More money for investments

According to Kent Damsgaard, an important indicator right at the beginning of the year is the willingness of companies to invest.

The interest and capacity to spend money on things such as new technology and software has helped break the stalemate. In previous years, the lack of investment has been a major hindrance to development for many companies. The renewed willingness therefore comes as extremely good news.

“The availability of funding for investments is entirely decisive for competitiveness, particularly at a time of rapid technological development. This is the case in both small and large companies. In total, Danish companies currently invest DKK 50 billion less than has been the general trend historically. And this is something that ought to be remedied” he says.

See also: Rating portal will help companies find financing

Lack of qualified labour

One of the keys to fulfilling the positive expectations for 2018 is obtaining the right workers.

However, this challenge constitutes the biggest risk factor, emphasises more than every fifth company. It will be one of the year’s biggest hurdles – one that also requires action from politicians – in order to avoid impeding growth opportunities.

“It will be crucial that a majority in parliament realises the need to ensure sufficient labour, because this is a central factor in order for Denmark to maintain its prosperity. If this does not happen, we fear that we will see even more companies being forced to turn down orders due to labour shortages in 2018,” says Kent Damsgaard.

In total, Danish companies currently invest DKK 50 billion less than has been the general trend historically. And this is something that ought to be remedied.

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PUBLISHED: 1/10/2018 LAST MODIFIED: 1/10/2018