National Bank of Denmark analysis finds top 25 companies’ value-added share rising to 12.8% of GDP is weakening GDP as a guide to domestic capacity pressure

The National Bank of Denmark published an analysis on how a modest number of very large Danish companies are accounting for a growing share of economic activity, reshaping the link between GDP, employment and capacity utilisation. Their greater reliance on intangible assets and production abroad means GDP can fluctuate more without corresponding swings in domestic labour demand, raising the bar for using GDP alone to assess the business cycle and calibrate fiscal stabilisation. The gross value added of the 25 largest companies (measured by value added) rose from 7.6% of GDP in 2009 to 12.8% in 2023, with an exceptional 18% share in 2022, while their employment share fell from 6.0% to 4.9%. These firms are typically more capital-intensive, hold more intangible assets, and are more internationally oriented than other large Danish companies, which both amplifies their importance for aggregate fluctuations and limits domestic spillovers relative to their size. The analysis concludes fiscal policy should focus on stabilising domestic production capacity and labour demand and only to a minor extent dampen GDP increases that do not reflect rising domestic employment beyond potential, highlighting gross value added excluding Danish companies’ production abroad as a useful complement to GDP within the 2–3 year forecast horizon; it also notes concentration increases exposure to company-specific downturns (an average top 25 firm in 2023 had about 6,000 employees, while the largest would mechanically correspond to about 1.9% of value added and around 14,000 employees).