Danish productivity during the upswing
Productivity growth in the Danish economy has been weak in the wake of the financial
crisis. This is especially the case from the 2nd half of 2015 and onwards when the
decoupling of output and the labour market situation calls into question future
productivity growth and the actual sustainability of the growth in employment seen
during the last year or so. Nevertheless, the wage share of the employment-intensive
private non-primary sector excluding transport does not indicate a general imbalance
between productivity and wages. Consequently, the increase in employment is assessed
to be sustainable. The low productivity growth is attributable to a series of factors,
including falling North Sea production, lower capital intensity and between-sector shifts.
Although productivity is a key driver of economic growth, it is not the only source of
enhanced prosperity. A substantial improvement of the terms of trade and increasing
return on foreign assets have contributed to prosperity in Denmark developing in line
with that of other advanced economies since the financial crisis.