“Growth in the US economy is disappointing and is, unfortunately, running at a very low level at the moment. The incredibly low rate of growth in the United States is not good for the world economy which is growing at its slowest rate since the financial crisis. We had hoped that the Americans would be able to kick-start the world economy for the benefit of Danish exporters, among others,” says Senior Analyst Allan Sørensen of the Confederation of Danish Industry.
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The disappointing developments in the first half of 2016 mean that growth expectations earlier in the year cannot be met. The United States is now expected to achieve a growth rate of 1.5% this year. Growth is, however, expected to increase in the coming quarters and end up at a rate of almost 2.5% next year.
“Luckily, there is a prospect of growth increasing in the United States in the coming quarters. It is private consumers, in particular, who are keeping the US economy going. As unemployment is low, consumer confidence is high and salaries are growing in real terms, there is a prospect of continued growth in private consumption. It is also worth noting that the Americans have reduced stocks which is good news for growth going forward as this means that production will be increasingly required to meet future demand,” says Allan Sørensen.
Last year, exports to the United States rose by 11% and reached DKK 100 billion for the first time ever. Only the Germans and Swedes buy more from Denmark than the Americans.
“Last year Danish exporters saw a very decent increase in exports to the United States and now 10% of Danish exports go to the American market. Growth rates in the American economy are currently very weak, but there is still a prospect of increased growth as the dollar remains strong so that Danish businesses still have good opportunities in the US market,” says Allan Sørensen.
In the first six months of 2016, Danish exports to the US market were at the same level as in 2015. Exports of services in the first half of 2016 were approximately DKK 5 billion lower than in the first six months of 2015. This is due to a decrease in sea transport.