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Denmark's upswing will fizzle out without more workers: DI

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Denmark's upswing will fizzle out without more workers: DI
File photo: Ida Marie Odgaard/Scanpix Denmark
18:07 CET+01:00
Private consumption in Denmark has hit record levels and 60,000 new jobs will be created over the next two years according to a new forecast.

But the upswing is entirely dependent on whether companies are able to obtain labour, says CEO of the Confederation of Danish Industry (Dansk industri, DI) Karsten Dybvad in light of the DI forecast.

The Danish economy is doing exceptionally well, but Denmark is also in dire need of hands and heads, shows a DI analysis that looks at this year and next.

"Business is full throttle. We can look forward to more than 60,000 new jobs over the next two years. This incredible development will bring about major job opportunities for Danes and money to finance society and welfare," Dybvad said.

One of the things lifting Denmark's economy is the fact that Danes have again started spending. Since 2009, Danes have tended to save up, but in 2018 and 2019 private consumption will increase by 2.5 and 2.4 per cent respectively, DI's forecast shows.

"We are expecting the highest growth in private consumption in 12 years. That is good news, because it means that Danes can feel that things are going well for business - and for them, too," Dybvad said.

The DI CEO is not solely applauding the forecasted developments, given their dependence upon whether companies are able to acquire the labour they need to fill the many new jobs.

"Without more workers, the upswing will have an expiry date," he said.

The upswing has thus far been carried by the ability of companies to bring in talented foreign employees from Europe in particular, as well as the fact that many more seniors are staying in the work force longer, Dybvad elaborated.

"Without them, the upswing would have run into the sand long ago," the CEO said.

As he sees it, Denmark is at a crossroads.

"Either we need more hands and heads in the labour market so that the upswing can continue. Or we will have to come to terms with a stop to public expenditure so the economy does not boil over," he said.

An earlier DI Analysis shows that Danish companies are particularly optimistic about the future.

20 percent of the companies in DI's Business Panel expect a growth in revenue of more than ten percent in 2018, while over 50 percent expect growth between two and ten percent.

Dybvad praised the parliamentary majority for ensuring that companies today have better opportunities to recruit internationally than they did back in 2007 - before the 2008 global financial crisis - when they were facing a similar labour shortage.

"We are also benefitting from the fact that a responsible parliamentary majority took timely action with the retirement reform," he said.

He also noted that there is a possibility that private consumption will increase more than predicted in DI's forecast.

"If that happens, politicians will have to respond to the need for a tight financial policy that - as a minimum - does not increase public expenditure," Dybvad said.

READ ALSO: Minister's call for more foreign labour 'extremely positive': DI


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