EU services production rises as Cyprus records mixed sector performance

Services production across the European Union increased by 2.1 per cent year-on-year in August 2026, with the euro area recording slightly stronger growth, while Cyprus’ latest national figures show a mixed picture, with professional services and transport expanding but hospitality and administrative support activities contracting. According to Eurostat, services production rose by 2.2 per cent in the euro area and 2.1 per cent across the EU compared with August 2025, while both areas recorded a monthly increase of 0.3 per cent compared with July. The figures suggest continued expansion across much of Europe’s services economy, although performance differed considerably between individual industries and member states. In July, services production had increased by 0.4 per cent in the euro area and 0.3 per cent in the EU, meaning monthly growth in August was slightly slower in the currency bloc but unchanged across the wider union. Among the main service industries, information and communication recorded the strongest annual growth, increasing by 5.9 per cent in the euro area and 5.8 per cent across the EU. Transportation and storage also performed relatively well, rising by 2.1 per cent in the euro area and 1.9 per cent in the EU compared with August 2025. Real estate activities increased by 1.6 per cent in the euro area and 1.1 per cent across the EU, while professional, scientific and technical activities grew by 1 per cent in both areas. Administrative and support services recorded annual increases of 1.1 per cent in the euro area and 1.3 per cent in the EU. However, accommodation and food services were the only sector to record an annual contraction, declining by 0.1 per cent in both the euro area and the EU. The monthly figures offered a more uneven picture, with information and communication again leading growth, increasing by 1.2 per cent in the euro area and 1 per cent across the EU. Real estate activities rose by 0.4 per cent in the euro area and 0.9 per cent in the EU, while transportation and storage edged up by 0.1 per cent in the euro area but declined by 0.2 per cent across the wider union. Administrative and support services increased by 0.2 per cent in the euro area and 0.1 per cent in the EU. By contrast, accommodation and food services fell by 0.3 per cent in the euro area and 0.4 per cent in the EU, while professional, scientific and technical activities declined by 0.8 per cent and 0.9 per cent respectively. Romania recorded the strongest monthly expansion, with services production increasing by 5.2 per cent, followed by Malta at 1.8 per cent and Portugal at 1.7 per cent. The largest monthly declines were recorded in Luxembourg, where production fell by 5.1 per cent, followed by Bulgaria at 2.3 per cent and Denmark at 1.9 per cent. On an annual basis, Slovakia led the EU with growth of 10 per cent, followed by Greece at 9.3 per cent and Malta at 7.5 per cent. The weakest annual performances were recorded in Hungary, where services production declined by 5.6 per cent, Denmark with a fall of 5.3 per cent and Italy with a decrease of 0.3 per cent. Cyprus presents a more mixed picture in its latest national services figures, published by the Statistical Service (Cystat), although these measure turnover rather than the volume of production reported by Eurostat. Cystat’s Turnover Value Index for Services and Transport showed that professional, scientific and technical activities recorded the strongest growth among the covered sectors in the second quarter of 2026, increasing by 3.4 per cent year-on-year. Transport and storage and information and communication activities both recorded increases of 2.1 per cent, while real estate activities expanded by 1.6 per cent. However, the domestic figures also revealed weaknesses in sectors that are important to the Cypriot economy, with accommodation and food services recording a 3.1 per cent decline compared with the second quarter of 2025. Administrative and support service activities also contracted, falling by 2.2 per cent over the same period. The picture was somewhat more favourable when the first six months of 2026 were considered together. During January to June, professional, scientific and technical activities recorded the strongest increase, at 3.5 per cent, followed by transport and storage at 2.8 per cent. Real estate activities increased by 2.1 per cent, while information and communication rose by 1.3 per cent. Nevertheless, administrative and support services declined by 1 per cent during the six-month period, while accommodation and food services fell by 0.7 per cent. The comparison highlights a divergence between Cyprus’ stronger-performing business and professional services and the difficulties recorded in hospitality-related activities. It is important, however, to distinguish between the two statistical measures. Eurostat’s services production index measures changes in the volume of output, whereas Cystat’s turnover value index is calculated at current prices and reflects changes in the value of sales. Consequently, the Cypriot figures cannot be directly compared with Eurostat’s August production growth rates, particularly as they also cover an earlier reporting period. Cystat transmits services production data to Eurostat, but its production index is not yet published separately at national level, making the turnover figures the principal publicly available national comparison for the sector. The different indicators nevertheless provide an indication of the underlying trends, with Cyprus recording growth in several business-oriented services while accommodation, food and administrative support activities remained under pressure.