Danish bankruptcies cost 1,000 jobs in September

A large number of Danish companies went bankrupt in September, resulting in job losses equivalent to 1,000 full time positions.

Danish bankruptcies cost 1,000 jobs in September
A closed cafe in Copenhagen during Denmark's lockdown in March. Photo: Ida Guldbæk Arentsen/Ritzau Scanpix

In total, 183 active Danish companies went bankrupt last month, resulting in 1,155 full time jobs being lost.

The number, registered by Statistics Denmark, is twice that recorded in August.

If figures from March onwards are taken into account, the number of jobs lost due to bankruptcies in 2020 is 25 percent more than that for the corresponding period last year.

That appears to point to a significant economic impact due to coronavirus, in keeping with other indicators earlier reported in Denmark.

READ ALSO: What does Denmark's GDP drop tell us about jobs and the economy? 

“The lost jobs come primarily from sectors hardest-hit (by coronavirus) such as hotels and restaurants, where you are also employee-heavy,” economist Anders Christian Overvad of Arbejdernes Landsbank told Ritzau in a written comment.

“With an expected increase in bankruptcies, we also expect the number of lost jobs to increase,” Overvad added.

The economist added that a “relatively short, but extremely deep” downturn was expected in the Danish economy.

“The big blow to Danish economy will undeniably cause more businesses to go bankrupt, but we will also see this happen over a short period,” he said.

“However, the probability of a longer (economic) crisis has increased – if the crisis changes character, we will also see a larger increase in the number of bankruptcies,” he said.

Unemployment was up by 50,000 compared to the level in March, when the pandemic first reached Denmark, but has since recovered somewhat, standing at 23,000 more than the number at the beginning of the spring.

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Labour shortage hits half of Danish companies in construction sector

A record-high shortage of labour at some Danish companies is exacerbated in some places by a lack of materials, according to new data.

A file photo of construction in Aalborg. As many of half of construction companies in Denmark currently report a lack of labour.
A file photo of construction in Aalborg. As many of half of construction companies in Denmark currently report a lack of labour. Photo: Henning Bagger/Ritzau Scanpix

The construction industry reports a lack of labour at around half of all companies, according to a survey by Statistics Denmark, based on responses from businesses.

In the service industry, which includes restaurants, hotels and cleaning, one in three companies reported a lack of workforce.

Some industries, notable machinery related businesses, also said they are short of materials currently.

The lack of labour is holding the Danish economy back, according to an analyst.

“Never before have we seen such a comprehensive lack of labour in the Danish economy,” senior economist Søren Kristensen of Sydbank said.

“It’s a shame and it’s a genuine problem for a significant number of the businesses which at the moment are losing revenue as a consequence of the lack of labour,” Kristensen continued.

“That is costly, including for all of Denmark’s economic growth. Even though we on one side can be pleased that it’s going well for the Danish economy, we can also regret that it could have been even better,” the economist said in a comment to news wire Ritzau.

Despite the lack of labour, businesses have their most positive outlook for years, according to Statistics Denmark.

The data agency based its conclusions on a large volume of responses from companies related to revenues, orders and expectations for the future.

The numbers are processed into a measure termer business confidence or erhvervstillid in Danish. The October score for the metric is 118.7, the highest since 2010, although there are differences between sectors.

READ ALSO: Are international workers the answer to Denmark’s labour shortage?