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. The forthcoming expansion of ECB QE will delay the unwinding of the ultra-loose monetary policy by the Danish central bank. This in turn will delay the slowdown in private consumption growth that the normalisaiton of monetary policy would inevitable entail for later in 2016.
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 nevertheless retain the view that the government will remain unstable. The one-party minority government will have a difficult time passing legislature, making it likely that the cabinet will be ousted before its term ends in 2019.
Denmark Industry Coverage (11)
BMI View: We expect rising interest rates and a planned end to tax breaks on electric vehicles to contribute towards a slight slowing in sales growth for both passenger cars and commercial vehicles in 2016. We forecast that new vehicles sales will growth by 7.6% in 2016, down from 9.3% in 2015.
|Passenger Car and Light Commercial Vehicle Sales|
|f = BMI forecast. Source: Statbank Denmark, BMI|
Commercial vehicles are outperforming cars as the Danish economy regains strength....
Food & Drink
Denmark Food & Drink
BMI View: Boasting a consumer base of 25mn with some of the strongest purchasing power in the world and offering a favourable business and regulatory environment, the four Nordic markets could offer attractive investment opportunities. That said, there are limited opportunities for growth, as the economic and demographic outlook remains relatively grim. Moreover, the food and drink markets are highly concentrated, presenting significant challenges for new entrants.
BMI View : Demographic changes and innovation by the insurers will support steady growth in DKK terms in life premiums. The expansion of the economy and innovation will underpin growth in DKK terms in the non-life segment (outside the motor vehicle insurance sub-sector at least). Currency movements will cause premiums to contract in USD terms this year, but will boost growth in the later years of the forecast period.
In USD terms, premiums will contract quite sharply in both the major segments during 2015. However, in DKK terms, premiums in both segments should grow by around 3%. Thanks in part to demographic trends (in the life segment), the prospects of reasonably steady growth (in the non-life segment) and innovation on the part of the insurers (in both), we think that this rate of growth will be sustained through the forecast period. The trajectory in USD terms will...
Denmark Medical Devices
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 forecast US dollar CAGR of 1.4% for the 2014-2019 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
We forecast that the medical device market will grow at a 2014-2019 CAGR of 1.4% in US dollar terms, which will increase the market value from USD1.6bn in 2014 to USD1.7bn in 2019. Market growth will continue to be constrained by cost containment...
Oil & Gas
Denmark Oil & Gas
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 throughout most of our forecast period, exports will become increasingly thin.
Pharmaceuticals & Healthcare
Denmark Pharmaceuticals & Healthcare
BMI View: In comparison to other Western European markets, Denmark's pharmaceutical industry is relatively small. However, BMI views Denmark as a highly attractive market for multinational drugmakers as a result of the country's stringent regulations, business transparency and high public health expenditure. The country's ageing population will be a key factor in driving medicine sales over the long term, although the possibility of further drug price cuts poses a downside risk to our forecast, as the government will look to manage rising healthcare costs.
Headline Expenditure Projections
Pharmaceuticals: DKK20.87bn (USD3.75bn) in 2014 to DKK21.30bn (USD3.14bn) in 2015; +2.1% in local currency terms and -16.2% in US dollar terms. Forecast...
BMI View: This quarter our fundamental assumptions for Denmark, Finland and Sweden continue to be relevant. Taking into account relatively 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 three Nordic countries, as more regional instability ...
BMI View: We hold a quite muted view across the Nordics for this quarter - with opaque policy environments emerging in Finland, Denmark and Sweden, as the new governments chart out new courses for their energy policy. As all the countries are aiming to curb costs in their non-hydro renewables sectors segments, we expect growth to slow significantly from the levels of the previous decade.
BMI View: The Danish mobile market is saturated, with one of its main recent drivers being dedicated mobile broadband offers. The failed merger between Telia and Telenor will continue the price competition in the competition, which is why we believe the fixed market offers the biggest area for improvement. 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.
There were 7.621mn mobile subscriptions in Denmark at the end of June 2015, for a penetration rate of 134.6%.
BMI View: We expect the Danish tourism industry to demonstrate sizeable growth between 2015 and 2019; however, the industry will remain small and largely reliant on its Nordic neighbours and Germany, which represent its main source markets. Domestic hotel groups will continue to dominate, leaving fewer opportunities for foreign players to enter. The recent closures of key overland transport arteries into the country in an attempt to crack down on migrant inflows could...