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July 14th, 2013

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Recent figures regarding the economy suggest that better days are in store for Denmark.

Earlier this month, global information service group Experian released data confirming that the number of companies declaring bankruptcy this year was at its lowest since 2009. About 450 companies are throwing in the towel each month, and although that number is still double what it was back in 2007, it marks a significant improvement from a peak of around 600 back in mid-2010.

The fall in bankruptcies comes at a time when manufacturers are noting an uptick in their orders, according to a Nordea bank report. May this year looked especially good, with production levels up 5.4 percent compared with the same month last year.

As a whole, the country continues to sell more abroad than it purchases. Over the past 12 months, exports have exceeded imports by 106 billion kroner.

Jobless numbers were down as well. According to labour market authority Arbejdsmarkedsstyrelsen, 423 people were handed pink slips in June – half the number who were let go in the same month last year. The last time there were so few layoffs in June was in 2007, before the Great Recession had taken hold in earnest. During the first six months of the year, the number of layoffs dropped 25 percent compared with the same period last year.

Jan Størup Nielsen, the chief economist at Nordea, warned against jumping to conclusions.

“In previous years we have seen numbers that have given us reason to be positive, but both 2010 and 2011 proved to be disappointing,” said Nielsen. “But there is definitely reason to hope, and that hope is a lot better founded than is has been before.”

According to Nielsen, the positive numbers could primarily be attributed to increased consumer spending and confidence.

“For quite some time now there has been every possibility for private consumption to rise, but worrying news from the housing and job markets have affected people’s outlook,” he said. “We can see that the mentality is changing and that consumers are becoming more positive.”

The main problem facing the economy remains the situation in Europe, Denmark’s biggest export market. The situation in southern Europe remains uncertain, and an unexpected slump among German manufacturers is a  sign that the economy is not out of the woods yet.

Nielsen, however, argued that despite the situation in Europe, the economy’s prospects were looking up.

“Most people base their opinion of whether we are in a recession or not on how the job market is performing,” said Nielsen. “I expect that by mid-next year, conditions in the job market will have improved significantly, and then we can finally say that we are out of the recession.”