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
Although Denmark is not part of the eurozone monetary union, its deep financial and trade links have been strengthened by its pegged exchange rate regime, leaving its open economy dependent on eurozone demand and significantly exposed to any flare up of the eurozone debt crisis.
A burst housing bubble and subsequent bank failures have made Denmark a Nordic underperformer, and the after-effects will continue to weigh on growth in the medium term. Although Denmark is in the process of staging a broad based economic recovery, the outlook remains dependent stable external demand and a sustained recovery in house prices.
Denmark's regional relative safe haven status faces few imminent risks given favourable public debt dynamics and stable fixed currency regime. However, this inflow of capital has masked structural economic...
Denmark Industry Coverage (9)
New vehicle sales remained resilient over the first nine months of 2014, according to figures from the Danish Car Importers Association - De Danske BilimportÃ¸rer (DBI). Passenger car sales were up by 5.1% over 9M13, at 142,105 units. Heavy commercial vehicle (HCV) sales were also up by 1.7%, at 2,592 units. However, it was light commercial vehicle (LCV) sales which showed the strongest growth over the Jan-Sep period, increasing by 15.8%, to 19.967 units. When added together, this makes for total vehicle sales of 164,664 units for 9M14. On current trends, this would imply some slight downside to our current forecast of 223,200 units sold for the full year.
However, we retain a generally optimistic view on the medium-term outlook for Danish new car sales. Our positivity is based on a number of factors. In August 2014, BMI's Country Risk team revised up our 2014 real GDP growth forecast slightly, to 1.4%, with 1.6% GDP...
Food & Drink
Denmark Food & Drink
BMI View: The Nordics consumer outlook remains gloomy as the regional economies are expected to feel the negative effects of the slowdown in the eurozone. In 2014 and 2015 real GDP (year-on-year) growth in each country is not expected to exceed 2.8%. Heavy household debt load will continue to curb private consumption in Denmark and Norway, while Sweden and Finland will suffer from relatively high and sticky unemployment levels.
Food consumption (local currency) growth year-on-year (y-o-y) in 2014: +4.0%; compound annual growth rate (CAGR) 2013-2018: +4.9%
BMI View: Developments through Q414 confirm our view that premiums will likely fall slightly in the coming months in USD terms, and will expand only slowly through the forecast period. However, the formidable strengths of both major segments continue to stand out. In the life segment, leading players are competing on the basis of excellence of investment performance (and low costs for clients). In the non-life segment, the leaders are competing in numerous ways - cutting prices, doing deals, reducing claims and other costs and developing new distribution channels.
Total insurance premiums in Denmark amount to over 9% of GDP and are rising by this measure. Total insurance premiums are equivalent to USD5,400 or so per capita. These metrics highlight how Denmark is home to one of the strongest and best established insurance sectors of any of the countries that...
Denmark Medical Devices
Espicom Industry View: Denmark represents a mature medical device market with above average per capita spending. The market is being constrained by stagnating 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 US$1,587.3mn in 2013, equal to US$283 per capita. The market is projected to grow...
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, we highlight that exports will become increasingly thin by the end of our forecast period, notably for crude.
Pharmaceuticals & Healthcare
Denmark Pharmaceuticals & Healthcare
BMI View: Our outlook for Denmark's pharmaceutical industry is relatively optimistic going into 2015 as we expect the country's small pharmaceutical market to return to growth for the first time since 2009. We maintain our view that Denmark is an attractive market for drugmakers to operate in due to the country's high per-capita drug expenditure, transparent operating environment and strong regulatory climate. However, as the country's aging population increases, government cost-containment measures will be focused on the healthcare sector in order to cope with spiralling costs.
BMI View: With our fundamental assumptions for the three Nordic markets covered in this report unvaried, our forecasts for their power sectors remain largely unchanged this quarter. Overall, we maintain our view that, while growth expectations in the region are improving, economic woes in the eurozone remains a major risk factor for the consumption and generation outlook of the three Nordic countries, as more regional instability...
BMI View : With our fundamental assumptions for the three Nordic markets covered in this report unvaried, our forecasts for non-hydropower renewable energy generation in the Nordics remain largely unchanged. 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.
We are maintaining our 2014 forecast for non-hydropower renewable energy generation in the Nordics this quarter. This is because key projects in the region continue to progress in line with our expectations. For 2014, we expect non-hydropower renewable...
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.