January 17, 2024

Professional services in EU: 1.5 trln EUR and +5.5 mln new jobs since 2013

In the European Union, services are the most dynamic economic activity accounting for about 75% of GDP and employment. The EU is the world's biggest exporter and importer of services, with the volume of exports of services significantly exceeding the volume of imports.

“Services” include a wide variety of sectors: transport, telecommunications, professional and scientific services, financial services, postal and courier services, retail and distribution, environmental services and tourism.

One of the most significant in terms of creating a sustainable base for the development of urban economies and creating a comfortable business environment for businesses is Professional services sector. Professional services include professional, scientific, and technical activities, administrative and support service activities.

European enterprises operating in the field of “Professional services sector” In 2022 created more than 1.5 trillion euros of added value. The volume of added value of the sector has increased by 46.9%.

More than 70% of total volume are contributed  by the cities of TOP-5 countries - Germany, France, Italy, Netherlands, Spain.

If we compare countries by the volume of the Professional services sector per capita, then leading countries are, by a wide margin, Luxembourg (17.6 thousand EUR per person), followed by Ireland (9.3 thousand EUR), Switzerland (8.8 thousand EUR), the Netherlands (7.2 thousand EUR) and Belgium (6.6 thousand EUR), then 9 more countries are above the average European level - Sweden, Norway, the Netherlands, Iceland, Malta, France, Germany, Austria and Finland.

Looking over the whole period from 2005 to 2022, professional, scientific, technical, administrative and support services recorded an overall increase of 43.9%. It is the second highest growth after information and communication activities.

Based on their available data on the number of employees and the number of operating enterprises, it can be said that in 2020, at the peak of the decline in employment in the services sector, at least 8.8% of the total number of persons employed in the EU and 19.2% of the total number of enterprises in the EU in 2020. Based on estimates of preliminary data for 2023, CDP experts suggest that employment and the number of enterprises have certainly increased.

Traditionally, the services activity is the largest part of economy of any European city and traditionally, Professional services industry have a significant share of employment in all major European cities and cities that have historically been logistics and business hubs.

The level of development of the Professional services industry makes city attractive for investment and all other types of business. Moreover, well developed Professional services industry means strong and sustainable economic development of the city and high level of well-being of residents.

Who is the leader?

The list of leading cities for employment in the Professional Services sector of the total number of city residents includes all the largest cities in Europe. The percentage of occupancy varies from year to year but remains generally stable. All these cities are historically world business and scientific centers.

What are the new trends in the development of the Professional Services industry?

In absolute terms of growth in the professional services sector in the last decade, Germany leads by a large margin (+200 billion euros), France is in second place by a significant margin (+85 billion euros), and the Netherlands is third (+46 billion euros).

But it is important to evaluate the growth rate of the sector in percentage terms, since the country’s own dynamics become noticeable. In the group of countries included in the TOP 10 in terms of value added produced by the Professional Services Sector in 2022, we can highlight the outstanding growth rates of Ireland (by a large margin from other countries, it grew by a record +167.2%), Poland (+90%) and Belgium ( +58%). In the group of countries between the 11th to the 20th place sin terms of the volume of the Professional services sector, we can highlight high rates of development in Luxembourg (+141.4%), Romania (+122%), Portugal and Hungary (+88.9 and +86.4% respectively).

Such a significant increase in the Professional Services segment indicates a sharp positive increase in the competitiveness of the largest cities in these countries in terms of attractiveness to investors and the creation of new businesses and high paid jobs.

In terms of the number of people employed in the sector, employment growth over 10 years amounted to about 5.5 million new jobs. The largest increase in absolute value occurred in France, Germany, Italy and Spain - the largest economies in the eurozone. In relative terms, the largest increases were shown by Hungary (+62%), Poland (+42%) and Portugal (+36%)

How successful were the growth leaders in maintaining the pace in 2023? CDP center experts assessed preliminary data for the first three quarters of 2023

Based on the results of the analysis of the growth of the Professional Services Sector of the first three quarters exceed the average annual growth rate of the last decade such countries as Belgium, France, Germany, Italy, Netherlands, Norway, Poland, Romania, Spain and Sweden.

Austria, Czechia, Denmark, Finland, Hungary, Luxembourg and Portugal , with a high degree of probability, will also be able to exceed the average annual growth rate of the sector over the last decade in 2023.

Also, according to preliminary data for 2023, we can already expect that the leaders in increasing sector growth rates will be Norway, Sweden and the Netherlands

We concluded that the European sector Professional services continues its steady growth for the third year in a row. Let's hope for growth in 2024 against the backdrop of decreased inflation; this will confirm the status of sustainable growth, since of course in 2022 and 2023 the price factor also contributed to the growth of sector turnover.

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