Denmark reports job growth, but employment figures likely to reduce in 2024

Positive employment figures have been the ‘sunshine story’ of 2023 in Denmark, the Danish Chamber of Commerce (Dansk Erhverv) has said, although it expects job growth to slow next year.

According to Statistics Denmark, the number of individuals employed in Denmark grew by 1,300 in October, with public jobs rising by 700 and private jobs increasing by 600.

Employment has now increased by 33,700 over the past year, with growth in 11 out of 12 months, Dansk Erhverv noted, despite headwinds from higher interest rates, inflation, and a slowdown in exports.

According to Tore Stramer, chief economist, however, while the employment numbers are a positive factor as we head into 2024, a reduction in employment is likely to be on the cards in the New Year.

Slowing momentum

“If we look at the other key figures, there are signs that the momentum on the labour market is slowing down,” he commented.

“The number of vacancies has fallen clearly throughout the year, at the same time that companies have generally reduced their employment expectations.”

A soft landing

Stramer did add, however, that the declining figures are not set to significantly affect the stability of the Danish economy.

“As a starting point, there is a prospect of a soft landing, where employment will only slowly fall from the current record high levels,” he noted. “As things stand now, we expect a fall in employment of approx. 20,000 people. towards the end of 2025.”

Stramer further emphasised that the imperative now is to moderate the pace of the Danish labour market to prevent overheating in the country’s economy in the near future.