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7 Feb 2019 – Articles

Budding optimism in Danish small and mid-size companies

New Danske Bank report done by analysts at Epinion shows that there is budding optimism among Danish companies of smaller size. The report covers 900 decision makers in companies sized 2-249 employees and confirms our customer’s expectations the way we hear them on daily meetings.

Highlights from the report 

Small and mid-size companies have positive expectations for their revenues in 2019.

  • 2 out of 3 believe that revenues are going up in 2019. More than 25 pct. expect a + 10 pct. increase in revenues
  • Only 5 pct. see a possible revenue decline
Optimism has a spill over effect in terms of hiring.

  • 30 pct. of the companies expect to hire more people 
  • Only 5 pct. expect staff reductions during the coming 12 months 
Clear trend towards optimism closely linked to orders related to the Danish market.

Similar reports from 2016-2017 shows same pattern: optimism is high in terms of growth in orders related to the Danish market.

  • 34 pct. see increasing domestic demand as their biggest growth opportunity in the years to come 

Lack of qualified labour is the biggest threat to growth in general – and the problem is getting bigger every year.

According to Las Olsen, Chief Economist in Danske Bank, companies in general will benefit from later future retirement in Denmark due to political legislation. But the question is: Can we keep attracting the needed qualifications from outside Denmark in terms of employees, since companies from big parts of Europe are struggling likewise? 

  • In 2016 a similar report showed that 12 pct. of the companies saw lack of qualified labour as their biggest threat to growth. The 2018 results show that these numbers have now raised to almost 30 pct.  

Increased lending can support growth and investment plans 

Despite trade wars and uncertainty about Brexit optimism is high among Danish companies. Obviously that’s very positive. This report confirms what’s also our impression during daily meetings with our business banking clients. In Danske Bank we have the necessary capacity to support the plans for growth as well as investments with increased lending. We have to make sure that growth expectations are a natural part of our strategic dialogue with the costumers, so that we help them move in the right direction pointing at their new markets.

Niels Bang-Hansen

Head of Business Banking Denmark, Danske Bank

What do bigger companies expect? 

Smaller Danish companies are more optimistic than bigger Danish companies. According to Las Olsen, Chief Economist in Danske Bank, the optimism that dominates small and mid-size companies is contrasted by the atmosphere and expectations, that have ruled among larger companies during the last couple of years.        

One of the reasons for this could be that small and mid-size companies are more focused on their home market, while bigger companies look beyond Danish borders. And the bigger global markets is facing challenges such as the trade war, political crisis in Italy, Brexit, slower economic growth in both China and Europe and rate hikes in the US.  
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