Do you sense the increasing Uncertainty in the IT industry?

Market Uncertainty Despite Previous Record Growth

Already in early 2024, the positive momentum in the Danish IT industry began to fade with growth slowing by 1.2%, according to the latest statistics. This marked a shift after years of impressive revenue increases.

In 2023, the sector achieved yet another record, reaching a total revenue of 313 billion DKK. Just two years earlier, in 2021, the industry had set a new benchmark with 283.4 billion DKK—a 13.8% increase from the previous year. Despite these strong numbers and high demand for IT resources, uncertainty loomed over what the future would bring.

At the time, CEO of IT-Branchen, Natasha Friis Saxberg, stated:

“We could easily have hired even more in the industry, there is an acute shortage of IT skills. Many IT companies have experienced that they have had to turn down assignments because they couldn’t find people to take them on…”

Now, as growth slows in 2024, the industry faces new challenges ahead.

Economic Turbulence and Global Conflicts Impact IT Investments

The negative direction in the market of the IT industry already started when the war broke out in Ukraine. The war and the resulting rising inflation have left their mark on IT professionals and companies. The rising prices of energy and raw materials, combined with the increased supply chain problems of companies’ main products—partly due to the extensive lockdown in China, where several subcontractors had to close production—have led to a slowdown in IT investments and development in some industries.

At the same time, unstable delivery times have made it even harder for businesses to plan and execute projects, further contributing to market uncertainty.

The current development in the IT market and the shortage of IT professionals mean that companies need flexibility and experts for their IT projects and development more than ever before. It is particularly in this area that freelancers can be an effective and flexible solution to the challenges both companies and the entire IT market are currently facing.

Companies Postpone IT Projects Amid Growing Uncertainty

But today the global economy, particularly in the U.S., is affecting many markets, including the Danish IT market. Economic uncertainty, inflation, and rising energy prices have caused many companies to slow down their investments and postpone IT projects. This has led to a decrease in demand for IT consultants and freelancers, and as a result, many are experiencing a quiet market within the IT industry.

Due to economic challenges, companies may choose to deprioritize certain IT projects or focus only on the most essential tasks. Freelancers who were previously working on expansion projects or new initiatives may therefore find themselves without tasks, as the focus has shifted to more essential, short-term tasks.

Already before Donald Trump was elected president, the Danish industry organization, IT-Branchen, wrote an article in October 2024 about how uncertainties affect growth in the it-industry, and with threats of tariffs from the USA, the economy has only become more uncertain.

Higher Tariffs Could Hit Danish IT Companies

Again in February this year IT-Branchen stated that they are concerned about how uncertainty in the global market could make businesses more hesitant to invest in growth and development.

The organization’s Membership Director, Bjørn Borre, also explained that changes in tariffs will impact IT companies that import or export hardware, while companies that solely provide software or digital services across borders are not directly expected to be affected by tariff increases.

IT Experts: The EU’s Response Will Be Crucial for the Industry

He further stated that they are waiting to see the EU’s response, as it could have significant consequences for imports, on which Danish companies are highly dependent.

A tighter trade policy or new restrictions from the EU could potentially make it more expensive and complicated for businesses to access the necessary technology, he said.