Consumer confidence back to pre-crisis levels

Danes are feeling better about the economy than they have since 2007, so does that mean the recession is finally over? The Local spoke to an economics professor to find out.

Consumer confidence back to pre-crisis levels
With confidence up, will flat spending finally see a spike? Photo: Copenhagen Media Center
Two newly-released consumer confidence studies indicate that Danes feel the recession is safely behind them.
Statistics Denmark’s consumer expectations survey revealed that Danes’ consumer confidence rose for a record fifth consecutive month, while Nielsen’s 2014 Global Consumer Confidence Survey showed that Denmark enjoys the highest level of consumer confidence in Europe.
In the Statistics Denmark index, in which respondents are asked about their both own financial situation and the general economic conditions in Denmark, consumer confidence rose to 10.6 points in July. That is the highest number since January 2007.
“The consumer confidence index has taken yet another hop up and now sits at 10.6 in July compared to 9.3 in June,” Statistics Denmark stated. “With that, the positive development in consumer confidence, which for the past year has been at an average of 7.1, continues.”
It is the first time in 40 years of the index that consumer confidence levels have increased for five straight months. 
While it might be tempting to say that the increase in confidence means that Denmark has finally recovered from the recession, Bo Sandemann Rasmussen, an economics professor at Aarhus University, said we are not quite there yet.
“We are pretty close to being out of the recession, but we seem to lack the final evidence that were are finally out of it," Rasmussen told The Local. "Some of the key indicators like growth and job creation don’t yet show the substantial evidence that the recession is truly over, but I think we can expect to come out of it in the next one or two quarters.”
According to Nielsen’s annual consumer confidence survey, Danes feel better about the economy than their neighbours do. While consumer confidence dropped in most European markets in the fourth quarter of 2013, Denmark was the only country to post a confidence score above Nielsen’s optimism baseline.
With an index score of 105, Denmark was just one of 11 countries in the world to indicate overall optimism. Neighbouring Germany had an index score of 95, while Sweden scored at 85. 
Nine out of ten countries with the lowest overall consumer confidence scores in Nielsen’s index were from Europe. The most confident countries were in Asia, with Indonesia, India, the Philippines and China taking the top four spots.  
Rasmussen said that the Nielsen results could simply be a matter of timing. 
“If you look back at the the last four to five years, we have had almost no growth in Denmark, whereas other countries have grown faster. Denmark has been at a standstill,” Rasmussen said. “People seem to be paying off their debt, but private consumption has been flat over the past five years. So we’ve been just a bit slower to come out of it than some of the other European countries.”

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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.