Dreary economic predictions could lead to jobs exodus

September 25th, 2012

This article is more than 11 years old.

Business minister is adamant that initiatives are underway after manufacturing company Danfoss threatens to move production out of Denmark

The Danish export sector is expected to shed up to 7,500 jobs by the end of the year, according to new figures from Denmark’s leading business lobby group, Dansk Industri (DI).

Although the Danish manufacturing and production industries have thus far managed to weather much of the ongoing financial  crisis, a report from DI’s business panel now predicts a negative fourth and final quarter of 2012.

The dour expectations – which forecast zero growth – come in the wake of a new report that was based on scrutiny of 453 of DI’s member companies. The quarterly predictions are the worst in two years.

“It’s actually a bit surprising because this news comes at a time when we believed that things were beginning to turn around,” Steen Nielsen, a spokesperson for DI, told TV2 News. “One explanation is the current economic downturn in all of Europe, but one must also factor in the fact that we have eroded our ability to compete through years of higher wage increases when compared to other nations.”

The continuing downward economic trajectory has forced many Danish companies to turn to foreign countries that offer cheaper business platforms and labour. And now, Danfoss, a producer of refrigeration components and one of the largest industrial companies in Denmark, has warned that they will move 6,000 jobs elsewhere unless politicians do something.

“If Denmark doesn’t take some political initiatives now, then production workers in Denmark will be threatened with extinction within ten years, because Denmark won’t be competitive,” Niels Bjørn Christiansen, Danfoss's CEO, told weekly publication Mandag Morgen.

The business and growth minister, Ole Sohn (Socialistisk Folkeparti), admitted that Denmark’s ability to compete has been lagging, but said that there were already a number of initiatives in place designed to change things for the better.

“We are working on it. We have the tax reform that reduces the tax at work. I have also established a company forum which is looking into how we can de-bureaucratise the rules and at the same time we have suggested removing the fat and sugar taxes,” Sohn told Mandag Morgen.

Sohn also mentioned the soon-to-be launched competitiveness proposal were the focus will be on looking closer at the high prices for goods and service in Denmark. But according to DI's Christiansen, things are proceeding too slowly.

“I hear from all the political parties, aside from Enhedslisten, that they comprehend the importance of the ability to compete and having some form of production. It’s moving in the right direction, but it’s not moving fast enough,” Christiansen told Mandag Morgen.


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