European services sector rebounds following June 2026 contraction

European Union services production returned to growth in July 2026 as seasonally adjusted output rose by 0.3 per cent across the bloc and by 0.4 per cent in the euro area, according to Eurostat. The modest recovery came after both the euro area and the wider EU recorded a 0.3 per cent decline in services production during June 2026. On an annual basis, services production in July 2026 increased by 1.5 per cent across both the euro area and the EU compared with the same month in July 2025. Within the euro area, professional, scientific and technical activities recorded the strongest monthly growth in July 2026, rising by 1.1 per cent compared with June 2026. Real estate activities in the single-currency bloc increased by 0.7 per cent month-on-month, while accommodation and food services grew by 0.6 per cent. Information and communication output in the euro area expanded by 0.4 per cent over the month, and administrative and support services edged up by 0.3 per cent. Transportation and storage was the only sub-sector in the euro area to record a monthly drop, falling by 0.1 per cent in July 2026. Across the broader EU, professional, scientific and technical activities also led the monthly gains with a 1.0 per cent rise in July 2026 compared with June 2026. Accommodation and food services, as well as information and communication activities, both expanded by 0.5 per cent month-on-month across the EU. Real estate activities, alongside administrative and support services, each recorded a 0.3 per cent monthly increase in the EU during July 2026. Transportation and storage mirrored the euro area performance, falling by 0.1 per cent month-on-month across the EU as a whole. Among member states with available data, Luxembourg recorded the highest monthly increase in services production in July 2026, surging by 7.6 per cent. Greece posted the second-highest monthly rise at 5.1 per cent, followed by Sweden with a 1.5 per cent increase. Conversely, Hungary recorded the largest monthly decline in services output, dropping by 4.5 per cent, followed by Denmark at 3.1 per cent and Slovenia at 2.7 per cent. On an annual basis, information and communication activities performed strongest across the euro area in July 2026, climbing by 3.1 per cent compared with July 2025. Professional, scientific and technical activities in the euro area increased by 1.7 per cent year-on-year, while transportation and storage rose by 1.5 per cent. Accommodation and food services expanded by 0.8 per cent year-on-year in the euro area, real estate activities grew by 0.7 per cent, and administrative and support services rose by 0.6 per cent. Across the entire EU, information and communication recorded the highest annual growth among service sectors, rising by 3.2 per cent year-on-year in July 2026. EU transportation and storage activities expanded by 1.6 per cent compared with July 2025, while professional, scientific and technical activities rose by 1.3 per cent. Administrative and support services increased by 0.9 per cent year-on-year in the EU, accommodation and food services grew by 0.7 per cent, and real estate activities recorded a 0.2 per cent gain. Among individual member states, Greece registered the strongest annual performance by a wide margin, with services production surging by 16.1 per cent compared with July 2025. Slovakia posted the second-highest annual gain at 8.7 per cent, closely followed by Estonia at 8.0 per cent. The deepest annual contractions were observed in Hungary, where services production fell by 5.4 per cent year-on-year, followed by Romania with a 4.6 per cent drop and Denmark with a 4.1 per cent decline.