Construction activity in Denmark is at its highest in many years

Since 2012, the Danish building and construction sector has realised projects equivalent to an overall contract sum of no less than €43b, and foreign businesses have good opportunities of expanding their activities in Northern Europe and improving their financial results.

From 2008 to 2012, the majority of the western world experienced a financial recession. The financial crisis, which was initiated by uncertain American mortgage loans, quickly resulted in both unemployment and declining activities in various industries. Not least in the building and construction sector.

Denmark was also hit hard. But a fundamentally healthy economy meant that the effects of the financial crisis become less devastating especially compared to countries in Southern Europe. And when Western Europe finally began to see the light at the end of the tunnel, the building and construction sector played a vital role in preventing an economic meltdown. Not least in Denmark where the share of realised construction and site development projects increased by 42.1% in the period 2012-2016.

The numbers are presented in an analysis prepared by the Danish analysis institute Byggefakta A/S. Not only has the construction activity almost doubled during this 4-year period. But this seems to be a continual trend. In the period 2012-2016, contractors and entrepreneurs have realised construction and site development projects equivalent to an overall contract sum of almost €43b. In 2016 alone, the industry realised construction and site development projects equivalent to an overall contract sum of €9.6b. 

Realised construction and site development projects in the period 2012-2016

Source: Byggefakta A/S 2017. Million Euros. Over the last 4 years, the number of realised construction and site development projects in Denmark have increased by 33%. This increase is most pronounced in the Greater Copenhagen Area where realised construction and site development projects have increased by 42.2%.

“It will be a little while yet before the building and construction sector reaches a level of business activity comparable to the years before the financial crisis. But we are closing in on regaining lost ground, and we will soon reach a level of business activity equivalent to an overall contract sum of approx. €15b annually”, says Managing Director of Building Network, Mickey Lund, adding:

“First and foremost, it is the private construction projects that drive the positive trend, and especially the massive public investments in Eastern Denmark will result in a pronounced increase in the level of business activity in the building and construction sector in the next 4-5 years.”

Especially Greater Copenhagen has been at the forefront of the development. In 2016, the Copenhagen Region accounted for 44.23% of the total construction activity, whereas the Zealand Region lags slightly behind. But according to Mickey Lund, this will change significantly in the next 4-5 years, once the construction of the road link to Germany via Femern Belt gets underway.

“This will trigger many additional construction and site development projects. These will be projects directly associated with the site development of well over 19 kilometres of immersed tunnel between Denmark and the German Femern Island, where it is predicted that especially subcontractors can expect exciting opportunities. But also procurement of goods and services will be able to attract many foreign businesses”, says Mickey Lund.

Denmark: Attractive business environment

Almost regardless of whatever parameter one uses to measure the business environment, Denmark currently represents an attractive investment opportunity when it comes to setting up a new business in Northern Europe.

Forbes, the American business magazine, has recently elected Denmark as the sixth-best country in the world to set up a new business. The reasoning behind this fact is, among other things, that Denmark is the least corrupt country in the world with the highest level of personal freedom. “Moreover, Denmark maintains a top ten position when it comes to innovation, easy set-up of private businesses and an attractive level of business taxation”, says Managing Director of Building Network, Mickey Lund. He continues:

“A good example is that it is possible to set up a new business in just a few hours. The Danes are generally very well educated – and based on several surveys, the population appears to be among the happiest in the world. And the essential reason for this is the fact that Danish salaried employees generally emphasize the importance of a positive and challenging working life.”

Bid from Home

Building Network has specialised in assisting foreign businesses with an easy and trouble-free business set-up in Denmark, including networking, scheduling meetings and finding potential business partners, before establishing an actual physical presence on the Danish market.

We help businesses collect market intelligence, relevant articles and assist with the preparation of targeted marketing materials, PR and advertising for the Danish market. But our most important assets are our knowhow and our Bid from Home turn-key concept, which enables businesses to receive contact data, unique information about relevant business opportunities and assistance with making open tendering bids in Danish. “Out active network consists of more than 1,000 companies, which give foreign businesses a head start to meeting potential clients, business partners or subcontractors”, says Mickey Lund, and he emphasises that the network represents the DNA of the consultancy and assistance services provided by Building Network.

Building Network is domiciled in Greater Copenhagen, but facilitate monthly regional construction and site development conferences in all corners of Denmark, where entrepreneurs, consultants, contractors and subcontractors are given the opportunity to network and initiate a dialogue with each other about upcoming construction and site development projects.