Business is surely being conducted in Scandinavia with optimism these days, even if there are a few warnings in the air.

In Denmark for example, the government said it will introduce policies to encourage expansion. Taxes are due for a cut this year and the government is under pressure to grant large public-sector pay rises.

This was accompanied by a fall in unemployment to 1.9% earlier this year. However there are forecasts of only sluggish economic growth this year and a difficult time for manufacturers, thanks to the global downturn.

Sweden has a few economic blips. The Economist Intelligence Unit expects the country’s gross domestic product growth to slow from 2.8% last year to 1.9% this year, though it should pick up a little next year.

Inflation is expected to reach 2.5% this year but a fall to 1.9% is likely next year. As in many other places, the lending criteria are forecast to be tightened – unwelcome information for those wishing to invest in new plant.

Yet Sweden’s public finances are predicted to remain in surplus and the government is talking of tax cuts in the 2009 budget along with measures to increase the demand for labour, which will help a 5.8% unemployment rate and consumer spending.

In Norway, oil continues to spread wealth. It will allow generous public spending in many areas, contributing to growth in manufacturing and employment.

It is often the case that a stream of money into the economy provokes inflation, and already energy and food prices are on the rise. Norway’s consumer spending is expected to cool, but the government has reforms up its sleeve to boost labour supply, the result of which should be more cash in circulation.

The Scandinavian picture is generally one of economic stability with no dramatic developments. However, manufacturers and distributors must bear in mind that the total population is under 20million, a third of the UK population and a quarter of Germany’s.

The laundry sector in all three countries is performing well. There is greater prosperity in Scandinavia and this could be the reason for the industry’s fortunes, says John Balman, sales director at Alliance International, which produces the Ipso brand.

Another reason could be the stimulation from intense competition, says Peter Wennekes, the secretary of Cinet, the international organisation for national laundry and drycleaning professional bodies.

Whatever economic explanations are given, Wennekes believes that workwear, which is becoming more common all the time in Scandinavia, will contribute to growth, much of it coming from the hospitality and healthcare sectors. The profile of the laundry is changing too.

The bigger laundry groups, dominant in Denmark and Sweden, are getting bigger, observes Steen Nielsen, managing director of Jensen, the laundry equipment group. Even Norway, whose laundries have always been small operations, is witnessing the gradual arrival of larger companies.

The Danish DFD group and the Swedish Berendsen company are notably strong in Denmark and Sweden.

Berendsen, which has been the leader in Sweden for many years, is now rivalled by Initial and the TL group, part of the German Boco organisation, formerly HTF.

Nielsen says that alongside the boom in Scandinavia’s hotel and restaurant business, the healthcare establishments are prompting the renewal of laundry equipment to satisfy the latest demands in quality and hygiene.

One unusual result of the consolidation in Sweden is that localised small laundries are starting as some big organisations try to achieve cost efficiency by closing plants, according to Bo-Lennart Jonasson, the Electrolux vice-president of global marketing and production management.

They are literally making way for enterprising small businesses.

A local laundry has more appeal in environmentally sensitive times. Using a nearby laundry instead of a centralised company cuts travel and with it exhaust emissions, as well as costs and time.

Hans Arnund, co-owner of the Swedish T-Tech distributor of Kannegiesser and Girbau machinery, points out that these customers are just not comfortable with the big groups. As a result, Arnund reports, smaller laundries are growing in Sweden and making inquiries about equipment.

Nevertheless, business sense tells Lapauw, the Belgian manufacturer, that it should target Berendsen and DFD in Denmark and Sweden.

Although much of the growth in Denmark and Sweden is down to booming hotels and restaurants, Wim Demeyer, Lapauw’s export manager, also sees some growth in healthcare.

Workwear, however, appears to be the main growth trigger in Sweden. Sten Jennervall, chairman of the Swedish Laundry and Drycleaning Association, says the laundry industry is growing anyway, but the working clothes and uniforms of nurses and carers provide valuable business. Many of the clothes are on rental arrangements and T-Tech’s Arnund says leasing has become the custom in Sweden.

Environmental considerations are affecting the laundry business in Sweden. Many public bodies insist on good environmental standards when they put jobs out to tender.

“For example, they state how much water you may use,” says Arnund. He believes the trend will continue, so that the future for laundries in Sweden will be a green one, in which there will be an insistence on water, steam and heat recovery and low energy use.

The laundry industry in Norway grew by 8% last year, according to the Norwegian Laundry and Drycleaning Association. The Norwegian tourism boom is reflected in the hotel and restaurant work being given to the laundries but another flourishing industry is having an impact too.

The North Sea oil rigs are keeping laundries busy and some are even specialising in work from the shipyards, says Lapauw’s Demeyer.

Tom Pedersen of Roderik-Jako, which represents Kannegiesser and Girbau in the country, says that attempts by care homes to set up their own laundries have been largely unsuccessful. Homes that tried to do the work themselves to save costs found on-site laundries were dearer to run.

Many Norwegian laundries are municipally owned. This usually guarantees that business is steady.

Nearly all Scandinavian laundries have one particular job – cleaning dust mats. People entering buildings routinely have to stamp the snow, sand and grit off their footwear first.

Although this aspect of laundry work is biggest in Denmark and Sweden, Pedersen reports it is now growing in Norway.

Scandinavia’s demand for mats will grow, predicts Patrick Morel, European marketing director of the manufacturer Milliken. Morel finds the demand is now for bigger mats, which maximise efficiency.

He also points out that market surveys have shown that more attractively designed mats are required. He recalls that until recently a mat with a logo advertising, say, a beer brand would show only the name of the company. This would involve about three colours. “Now we go for a picture of a glass of beer, using far more colours,” he says. “Logo mats are the most influential part of the growth.” More mats, of course, mean more business for the laundries. So what lies ahead for Scandinavian laundries?

Wennekes believes technological development will enable laundries to offer a higher quality of service in the next few years.

Environmental principles will be big in the next few years, says Balman at Alliance. Scandinavia has been a trail-blazer in environmental awareness. He adds that it follows that the environmental features of the machines will become even more refined.

Nielsen forecasts that this will mean more replacement of machinery. However, only the large groups will be able to afford the investment and more small operators will go out of business.

Fewer drycleaners

Scandinavia’s drycleaning industry is fitting the European pattern. The advent of washable and throwaway clothes has shrunk the number of drycleaning shops, but Gabriele Cuppini, sales director of the manufacturer Union, believes it is better to have a few making reasonable money than many achieving only tiny profits.

Cuppini sees Scandinavia as a good, stable, lean market that is still investing, but, realistically, substantial growth is now being found in Africa, India and China.

One important development is that more drycleaners are using hydrocarbon instead of perc – partly because it is cheaper, but it is also considered to be desirable environmentally.

Interestingly, the shops are bigger than the average, says Marco Niccolini, general sales manager of the manufacturer Renzacci.

Bigger machines, too, are being required in Sweden and Norway, says Niccolini, because thicker garments are being worn. He echoes Cuppini in calling Scandinavia a stable market. Possibly it is being kept going by non-domestic customers. Cinets’s Peter Wennekes finds that commercial work has replaced some of the domestic customers. The trend may guarantee stability.

The figures for the decline speak for themselves in Denmark. Ole Poulsen, head of the Danish Drycleaning Association, says that half the shops have disappeared in 20 years and adds that another 5% may go in the next ten years.

As the decline continues, the rules on using perc have hit some shops. Restrictions are tight on perc but it is easier for machines using hydrocarbon to gain approval.

Better news is that there is a hint of a return to formal wear in Denmark, particularly among young people, says Poulsen. A drop in the price of formal clothing is a factor.

Poulsen insists, however, that the key to survival must be better service. He suggests that a 24-hour service may help, though this would be impossible for the small Danish operators, which are in the majority.

In Sweden the number of drycleaners has fallen by two-thirds in 30 years, but the result, says Jennervall, is a solid market that should not contract further. The manufacturers hope this indicates future steady business.

More chains have taken over drycleaners in Norway but here too there has been a decline.

The hopeful sign is that business in carpet cleaning and shirt processing has increased, says Michael Christensen, director of the Norwegian Drycleaning and Laundry Association.

Can the decline be prevented from continuing in Scandinavia? Andreas Klensch, managing director and chief executive of the Fred Butler Group which promotes alternative drycleaning outlets, says the drycleaning industry has not done a good job of developing innovation. His company produces an eco-friendly system and its research and development department is continually working on new methods, he says – and gives as an example the system that mixes carbon dioxide with wetcleaning.

The system has been on the market for several months and has already been taken up by the Scandic hotel group. “It is the future of the industry,” he said.

But there’s also a job for governments. “We think they could be much stricter on the use of environmentally damaging chemicals,” he said.