Denmark

In-depth country-focused analysis on Denmark's economic, political and operational risk environment, complemented by detailed sector insight

Denmark

Our comprehensive assessment of Denmark's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Denmark, as well as the latest industry developments that could impact Denmark's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Denmark before your competitors.

Country Risk

Denmark Country Risk

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Core Views

  • Extraordinary monetary policy measures and improvement in the labour market will help offset a weaker external demand picture in Denmark. Private consumption will remain the main engine of growth, despite a very large household debt burden.

  • Denmark will experience broad political stability over the coming decade, but changes to the welfare state will see divisions emerge between left and right, and old and young. Meanwhile, opposition to immigration will increase. The government will continue to face demands from Greenland for full independence, although this scenario will not play out in our 10-year forecast period to 2024.

Major Forecast Changes

  • We have revised our discount rate forecast for Denmark to 0.00% until 2017, having previously projected 0.25% and 0.50% in 2015...

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Denmark Industry Coverage (9)

Autos

Denmark Autos

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Looking at early sales trends for 2015, a total of 58,094 vehicles were sold in Denmark over the first quarter, representing a 5.5% increase year-on-year (y-o-y). Breaking down the headline figure, passenger car sales stood at 49,278 units (+3%) for Q115. LCV sales were up by 17.4%, at 7,595 units. HCV sales were up by 67.5%, at 1,146, with HCV sales units, with bus sales up by 19%, at 75 units. Total CV sales stood at 8,816 units for the first quarter of 2015.

After two disappointing months at the start of the year, March was a particularly strong month for new vehicle sales, which were up by 18.8% y-o-y, at 23, 286 units. On current sales trends, there may some slight upside to our forecasts of 4% growth for the full year. However, we choose to await the release of additional monthly sales data before making any change to our current forecasts.

Overall, however, we retain a constructive view on the medium-term outlook...

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Food & Drink

Denmark Food & Drink

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BMI View: The Nordics consumer outlook remains gloomy, as the countries are expected to feel the negative effects of the slowdown in Russia and the eurozone. In 2015, real GDP growth in each country is not expected to exceed 2.4%. Heavy household debt loads will continue to curb private consumption in Denmark and Norway, while Sweden and Finland will suffer from relatively high and sticky unemployment levels.

Key Forecasts

Denmark

  • Food consumption (local currency) growth in 2015: +3.6%; compound annual growth rate (CAGR) 2014-2019: +4.5%

  • ...

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Insurance

Denmark Insurance

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BMI View : The Danish insurance sector will see modest growth over the coming years due to its mature and well-developed nature. However, the pension system will continue to drive premiums in the life segment and the non-life segment will see strong growth in the health insurance sub-segment over the 2015-2019 period. The large size of the sector in absolute terms provides asset management firms an attractive opportunity to provide their services.

Despite Denmark's insurance market being mature, there will still be growth opportunities for firms in selected areas. We expect insurance penetration to rise from 9.0% of GDP in 2015 to 9.4% of GDP by 2019 and insurance density to grow from USD5,243 per capita in 2015 to USD5,797 per capita by 2019. Much of this growth will come from the country's superannuation pension system, which is tied to its life insurance segment.

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Medical Devices

Denmark Medical Devices

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BMI Industry View: Denmark represents a mature medical device market with above average per capita spending. The market is being constrained by slow economic growth, which is increasing pressure to scale back the country's generous welfare system. As such the market is only expected to show low growth with a US dollar CAGR of 1.9% forecast for the 2013-2018 period. Local production is focused on consumables and patient aids, primarily hearing aids, leaving the majority of the market heavily dependent on imports.

Headline Industry Forecasts

  • The medical device market is valued at USD1,587.3mn in 2013, equal to USD283 per capita. The market is projected to grow at a CAGR of 1.9% in US dollar terms and 3.8% in local currency terms over the 2013-2018 period to attain a value of USD1,740.2mn by 2018.

  • Medical device imports...

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Oil & Gas

Denmark Oil & Gas

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BMI View: We expect a partial, but temporary recovery in oil and gas volumes over the medium term, as small developments come online. Past 2019 however, production will resume to the downside. While the country should remain a net oil and gas exporter, exports will become increasingly thin by the end of our forecast period.

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Headline Forecasts (Denmark 2013-2019)
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Pharmaceuticals & Healthcare

Denmark Pharmaceuticals & Healthcare

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BMI View: Denmark has a relatively small pharmaceutical market compared to many of its Western European counterparts. Despite the country's economy returning to growth in 2014, pharmaceutical sales are not expecting to follow suit until 2016. In the longer term, Denmark's aging population will have an unprecedented effect on the market with an older generation driving medicine and healthcare expenditure. However, in-line with many other European governments, the Danish government will increasingly off-set the positive effects of higher demands with price control mechanisms that dampens our outlook for the market.

Headline Expenditure Projections

  • Pharmaceuticals: DKK19.92bn (USD3.16bn) in 2014 to DKK19.65bn (...

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Power

Denmark Power

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BMI View: This quarter we have extended our forecast to 2024. This notwithstanding, we maintain our long-held view that, while growth expectations in the region are improving, economic woes in the eurozone remain a major risk factor for the consumption and generation outlook of the three Nordic countries, as more regional instability could undermine their economic activity. In terms of sector trends, we note that Denmark appears to be losing its...

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Renewables

Denmark Renewables

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BMI View: This quarter we have extended our forecast to 2024. This notwithstanding, our projections for non-hydropower renewable energy generation in Denmark, Finland and Sweden are largely unchanged, as our fundamental assumption for the Nordic markets considered in the report remain unvaried. Key projects in the region continue to progress in line with our expectations, with Denmark's progressive loss of its energy self-sufficient status likely to lead the country to a greater focus on the prompt development of renewables. We also note that Sweden's possible phase-out of nuclear energy could jeopardise the reliability of the system, while pushing the country towards a larger share of renewable generation.

Key Trends And Developments

  • The incoming Social Democrats and Green Party in Sweden have announced a coalition...

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Telecommunications

Denmark Telecommunications

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BMI View: The Danish telecommunications market is highly mature and increasingly focused around value-added premium services. Most notably, while the broadband market is growing steadily on the back of demand for converged services, the mobile sector is beginning to show signs of fatigue, with periodic declines in subscriber numbers linked to the retirement of low-value or inactive accounts. Curiously, adoption of M2M services lags behind other equally advanced European markets, although growth now seems to be accelerating. In this environment, there are scant opportunities for new or risk-averse investors, although the potential for niche value-added services is far from played out.

Key Data

  • The wireline market is forecast to continue shrinking, from 1.991mn connections in 2014 to 1.619mn by 2019. This is despite continued interest in...

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