European services sector maintains upward path despite wider stagnation

The European Union has seen a significant divergence in its economic sectors as of October 2025, with services recording a substantial 16.4 per cent increase since the start of the pandemic while trade and construction remain nearly unchanged, according to Eurostat.

This growth in the production of services stands in sharp contrast to the performance of industrial production, which grew by a more modest 2.3 per cent compared with February 2020, just before the onset of the global health crisis.

The data reveals that trade and construction have largely stagnated over the last five years, with the former rising by only 0.1 per cent and the latter by 0.2 per cent, leaving both sectors at almost the same level they occupied before the pandemic began.

It is worth noting that the EU economy was heavily affected by the Covid-19 crisis, experiencing a period of intense volatility that disrupted traditional growth patterns.

The EU’s production indices for industry, construction, services, and the total trade volume registered unprecedented decreases between February 12, 2020 and April 12, 2020, as the continent entered its first lockdowns.

During this brief but severe contraction, industry decreased by 27.3 per cent and construction fell by 26.7 per cent, while trade dropped by 22.3 per cent and services saw a 17.0 per cent decline.

After this initial shock, these economic activities entered a recovery period and about a year later, the former production levels had been re-reached across the board.

The trajectory of these 4 economic areas began to differ in early 2022, marking the end of the uniform recovery phase and the beginning of a more fragmented economic reality.

While industrial and construction production as well as trade either stagnated or began a slow decline during this period, the production of services remained on a consistent upward path.

This resilience in services, which excludes financial and public services, has become the defining characteristic of the European recovery compared with the more traditional industrial and trade sectors.

The figures for total trade volume include the sale of motor vehicles, wholesale trade, and retail trade, all of which have struggled to find significant momentum since the initial recovery phase ended.