Danish unemployment falls on strength of economic recovery

More unemployed people are entering the Danish labour market, new figures from Statistics Denmark showed on Wednesday.

Danish unemployment falls on strength of economic recovery
Although the economy is in an upswing, the construction industry is facing a labour shortage. Photo: Sophia Juliane Lydolph/Scanpix Ritzau
In September, the number of unemployed fell by 600 to 106,600. According to Tore Stramer, the chief economist at Nykredit, positive developments in the Danish economy have helped to shorten the queues at the nation’s job centres.
“The upswing has opened the door to many Danes who have previously had difficulty getting into the labor market. Additionally, the very low unemployment rate has contributed to increased job security for individual Danes,” he said.
September marked the sixth consecutive month in which unemployment numbers fell. Since unemployment peaked during the financial crisis, the number of those without work has fallen by about 60,000.
The overall unemployment rate is at 3.9 percent which hasn’t changed in recent months but remains at its lowest since February 2009. When the unemployment rate doesn’t fall even though the number of those out of work decreases, it’s because more people are entering the national labour market for the first time. 
According to Sydbank, it is a positive sign for the Danish economy when the unemployment rate does not fall too much.
“This partly reflects the fact that Danish companies have been proficient in obtaining labour from abroad. Over half of the new jobs created have been occupied by foreign workers, which has played an absolutely indispensable role in the recovery,” economist Søren V. Kristensen said. 
Industry leaders, however, warn that the low unemployment figures mean that there is a lack of workers in several sectors, including construction. Those problems are likely to persist for a number of years, said Bo Sandberg, the chief economist at the Danish Construction Association (Dansk Byggeri).
“At the moment, recruitment of competent employees is the biggest challenge in the construction industry. And it is a challenge that is here to stay,” he said. 


Number of people on Danish welfare benefits increases, reversing trend

After several years of decreases, the number of people whose income is supported by the state has gone up in 2019.

Number of people on Danish welfare benefits increases, reversing trend
File photo: Thomas Lekfeldt/Ritzau Scanpix

The second quarter of this year saw the number of people receiving the various forms of social welfare support reach 701,400, according to Statistics Denmark – an increase of 6,900.

The figures encompass all forms of social welfare payments, including support paid to people out of work (kontanthjælp, dagpenge, fleksjob) and special types of pension (efterløn, førtidspension) but not the state student grant (SU) or state pension (folkepension).

But the 2019 increase is due to a raise in the retirement age from 65 years to 65.5 years as of January 1st, 2019, according to Statistics Denmark.

That meant an increase in overall size to the group which falls into categories encompassed by the welfare benefits figure.

An additional 200 people available to the labour market are out of work compared with last year. 1,000 more people are receiving the dagpenge unemployment insurance, which is partly state-funded, while 1,200 left the system.

Although the number of people receiving benefits has increased this year, it is still some 150,800 lower than it was in 2010 and is close to the lowest figure recorded since 1987.

Reductions in the total in recent years have been related to lower unemployment and fewer people receiving the special pensions.

A strong Danish economy has contributed to this, as have pension reforms meaning many have had to work longer before retiring.