Danish industrial companies are increasingly lacking orders. This is evident from Statistics Denmark's business climate barometer for June, which is the result of a survey among a number of business companies in various industries.
Among other things, they are asked what prevents them from producing more. Here, a full 51 percent of industrial companies respond that they are affected by a lack of demand.
This is an increase of five percentage points compared to May, and it is also the highest share in the 35 years in which the statistics have been compiled.
If you go back just a few years, it was the lack of materials and equipment that was the biggest challenge for the industry. 65 percent expressed this in April 2022.
At about the same time, more than 40 percent expressed that a lack of labor limited what they could produce. In the latest survey, only 13 and 9 percent respectively indicate these two reasons as limiting.
Tariff increases in the US dampen demand
Tore Stramer, chief economist at the Danish Confederation of Business, believes that the reason for the lack of demand should be seen in the context of the announced US tariff increases. They caused many companies to fill up their stocks, which they have since depleted.
- Here and now I am not super worried about the development in demand for Danish industrial goods, and we generally expect continued reasonable development in industrial production over the coming months. But it is clear that we are following the development closely, and that a worsening of the trade war with the US is a major uncertainty, he says.
Statistics Denmark also calculates an overall business confidence indicator based on the responses. It rose slightly from 103.0 to 103.3 in June. The picture aligns well with the feedback that the Confederation of Danish Industry receives from its members.
- There are still slightly more people reporting good rather than bad growth prospects, but uncertainty plays a large role and is currently the biggest barrier to growth in the coming year, says Morten Granzau, deputy director of the Confederation of Danish Industry.
A business confidence indicator above 100 is an expression of generally positive expectations for the future.
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