The Danish economy was operating at close to its potential when the international downturn occurred. The underlying pace of activity slowed somewhat last year, although the estimated GDP growth of 1¼ per cent in 2001 overstates the apparent deceleration, since output in 2000 had been boosted by rebuilding work following the hurricane in December 1999. Export volume growth weakened sharply to around 4 per cent, and business investment shrank as sales prospects deteriorated. Nevertheless, increases in public and private consumption underpinned aggregate demand, total employment continued to rise, and unemployment fell further. With the labour market remaining tight, hourly earnings growth reached 4¼ per cent in the third quarter.