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.
Denmark Country Risk
Real GDP growth in Denmark will continue to be supported by a steady improvement in external demand, mainly from the eurozone. However, the large debt burden of the private sector will restrain growth over a multi-year horizon.
While Prime Minister Lars Lokke Rasmussen's hardline nationalist stance towards Europe's migration crisis has bolstered public support for the conservative right on Denmark's political scene, we retain the view that the government will remain unstable. The one-party minority government will have a difficult time passing legislation, making it likely that the government will be ousted before its term ends in 2019.
Major Forecast Changes
With consumer confidence and exports weakening, we have revised down our 2016 real GDP...
Denmark Industry Coverage (13)
BMI View: We believe that a combination of slowing economic growth and the phased ending of tax breaks for electric cars will lead to an easing in sales growth for the Danish new vehicle sector in 2016. We are currently forecasting 5.2% growth for the sector as a whole, with commercial vehicles to outperform passenger cars.
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Denmark Commercial Banking
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Food & Drink
Denmark Food & Drink
BMI View: A consumer base with some of the strongest purchasing power in the world, combined with a favourable business and regulatory environment, will continue to be an attractive characteristic for food and drink companies operating in Scandinavia. That said, market concentration and a weak demographic outlook will limit growth for new entrants.
Latest Updates & Industry Developments
Throughout our forecast period to 2020, household spending will experience healthy growth in the Nordics, given...
BMI View: The Danish construction sector will no longer be a regional outperformer in the medium term, due to a weak economic picture. However, investment in the infrastructure sector will drive a solid project pipeline. Areas that will particularly benefit from government, EU and institutional investor interest will be the rail sector and renewable energy expansion. In the long term, growth will moderate significantly as key projects finalise.
Latest Updates And Structural Trends
We have revised down further our medium-term industry growth outlook due to a constrained economic picture. Annual average growth of 1.5% over 2016-2020, means the...
BMI View: Conditions remain broadly favourable in Denmark's insurance sector. Demographics and the introduction of innovative products are boosting sales of health insurance. At a time of low interest rates and volatile financial markets, the life insurers appear to be capturing business from banks and other conduits for organised savings. We look for life and non-life premiums to grow, with downside risks mainly in the non-life segment, from price competition - particularly in the motor vehicle and property insurance sub-sectors. However, there are also macroeconomic risks, in view of downward revisions to our GDP forecasts.
These macroeconomic risks include the fact that citizens' demand for insurance would take a hit across the board, if the country fell into recession, with people of working age likely to favour more liquid savings options, under that eventuality....
Denmark Medical Devices
BMI View: Denmark represents a mature medical device market with above average per capita spending. Cost containment measures will continue to increase pressure to scale back the country's generous welfare system. As such the market will only show low growth with a forecast US dollar CAGR of 1.4% for the 2014-2019 period. Local production is focused on consumables and patient aids, primarily hearing aids, therefore the majority of the market will remain heavily dependent on imports.
Oil & Gas
Denmark Oil & Gas
BMI View: Development delays at the Hejre field and the accompanying forecast change will see Denmark become a crude net importer throughout the forecast period. While its status as a gas net exporter is maintained at the moment, we highlight strong downside risk to gas production and exports after Maersk Oil expressed a potential interest in closing the Tyra East and Tyra West fields by 2018.
Pharmaceuticals & Healthcare
Denmark Pharmaceuticals & Healthcare
BMI View: Despite Denmark's relatively small pharmaceutical market, which is restricted by the government's tough fiscal policies, we believe Denmark will remain an attractive market for drugmakers. The country's ageing population and high per capita spending will ensure demand for innovative medicines remains high. However, like many Western European countries, the increasing pensionable population will contribute to rising healthcare costs, creating the risk of further cost-containment measures from the government.
Headline Expenditure Projections
Pharmaceuticals: DKK20.87bn (USD3.75bn) in 2014 to DKK21.30bn (USD3.14bn) in 2015; +2.1% in local currency...
BMI View: This quarter we have revised our forecast for the nuclear power sector to reflect the impact of the tax on nuclear power generation, which was increased in 2015. Taking into account positive macroeconomic expectations for the Nordic region as well as sector trends, we continue to expect power consumption growth in 2016. Similarly, 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 country, as more regional...
BMI View: This quarter our fundamental assumptions for Denmark continue to be relevant. Taking into account positive macroeconomic expectations for the Nordic region as well as sector trends, we continue to expect power consumption growth in 2016. Similarly, 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 country, as more regional instability could undermine their economic activity.
BMI View: A slowing wind power sector, due to high penetration of intermittent wind in the power mix and muted power consumption growth, weighs on our outlook for overall non-hydropower renewables capacity growth in Denmark - despite relatively robust growth in the solar and biomass segments. An increase in policy uncertainty, due to governing party Venstre's aim to water down Denmark's ambitious carbon emissions targets, aligns with our expectations of a growth slowdown.
BMI View: We have a subdued outlook for the Danish telecommunications sector largely owing to the high degree of saturation prevalent in the market. The main recent driver of growth has been the dedicated mobile broadband offers. The failed merger between Telenor and TeliaSonera will continue to force operators to compete on the basis of price. We believe that the fixed market provides room for growth. Operators are moving towards more advanced broadband services, such as DOCSIS3.0 and fibre, to regain market share from mobile broadband, and using bundled services to lower churn. This is the first step in the battle for convergence, where deepening the customer base through upselling and not widening with new acquisitions becomes the core strategy.
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BMI View: Denmark's tourism industry remains on the small side and the country currently attracts around half the volume of visitors compared to neighbouring Sweden. Visitor numbers are expected to increase over the course of the forecast period through to 2020, as Denmark raises awareness of its many attractions, invests in business travel infrastructureand improves international travel connections. We do note, however, thatthere are growing downside risks due to regional security concerns and the implementation of stricter border controls, particularly along the border with Germany.