EU services lead business economy as Cyprus follows wider trend

Services accounted for more than half of the EU’s business economy value added in 2024, with the sector also employing more than half of the bloc’s business workforce, according to Eurostat data highlighting the importance of services to economies including Cyprus. There were around 34 million enterprises in the EU in 2024, employing 164.5 million people and generating more than €38.7 trillion in net turnover. These enterprises generated €10.9 trillion in value added, with the data showing a significant difference between the number of businesses and their respective contributions to employment and economic output. Large enterprises, employing more than 249 people, represented just 0.2 per cent of all enterprises in the EU’s business economy. However, they employed 37 per cent of the workforce and generated around 49 per cent of total value added. Medium-sized enterprises, with between 50 and 249 employees, accounted for 0.8 per cent of enterprises, 15 per cent of employment and 16 per cent of value added. Meanwhile, micro and small enterprises accounted for 99 per cent of all EU enterprises. Together, they employed 48 per cent of the business economy workforce and generated 35 per cent of total value added. The figures underline the central role of smaller businesses in the structure of the EU economy, despite larger companies accounting for a disproportionately high share of employment and value creation. Services dominate Services were the largest of the EU’s four main business sectors in 2024, accounting for 51 per cent of total value added. The sector represented 64 per cent of all enterprises and employed 53 per cent of the business economy workforce. Industry accounted for 28 per cent of value added, despite representing only 7 per cent of enterprises, while it employed 20 per cent of the workforce. Trade represented 15 per cent of value added, 17 per cent of enterprises and 18 per cent of employment. Construction accounted for 12 per cent of enterprises but generated 7 per cent of value added and employed 8 per cent of the workforce. The figures place services firmly at the centre of the EU business economy, both in terms of employment and value generated. The pattern is particularly relevant to Cyprus, where services also form a major part of economic activity, with tourism, shipping, professional services, information and communication and other service-based activities playing significant roles. Recent data from the Cyprus Statistical Service (Cystat) have shown broad-based growth across several service activities, while the Employers and Industrialists Federation (Oev) has also highlighted the sector’s contribution to employment, economic growth and international competitiveness. Tourism remains one of the most visible components of the island’s service economy, while shipping represents another internationally oriented part of the sector. The services focus also extends to areas such as professional, scientific and technical activities, information and communication, administrative and support services and real estate. Cyprus therefore broadly reflects the wider European economic structure identified by Eurostat, in which services account for the largest share of business activity and value creation. At the same time, the EU-wide figures underline the importance of smaller enterprises, a structure that is also relevant to Cyprus, where businesses are predominantly made up of small and medium-sized companies. Eurostat’s data ultimately show an EU business economy characterised by a very large number of small enterprises alongside a relatively small number of large companies that account for a substantial share of employment and value added. For Cyprus, the figures provide a wider European context for the continuing importance of services and smaller businesses to the island’s economic activity.