In contrast, other sectors less vulnerable to the shock of the conflict in Ukraine have remained buoyant in recent years. The most notable of these are information and communication technology (ICT) services, with annualised growth rates of around 4%; and professional, technical and scientific activities, which include innovation and software development.
The sectoral divergence of the EU economy can be broadly transferred to the relative behaviour among Member States, although it is worth noting different intensities from country to country (see the second table with data for the 15 largest economies). Taking all sectors into consideration, the countries with the highest growth since the end of 2022 are Ireland, Spain, Denmark and Portugal – with rates that more than double the average progress of the EU. This dynamism contrasts with the slight contraction in Germany and Austria, and the practical stagnation recorded in Italy, the Netherlands and Finland.
The three largest economies in the EU (Germany, France, and Italy) account for just over 50% of the total value added. However, in the last three years they have been responsible for just 20% of the bloc’s cumulative growth. Furthermore, we find few sectors where their significant role in the economy has translated into a dominant contribution, and some activities have even drained growth from the overall European economy, with the most paradigmatic case being the contraction of Germany’s manufacturing industry (see first chart). On the upside, there are isolated examples, such as the notable contribution of France in ICT and professional services – led by consultancy activities and the digital transformation.
In this way, the EU’s growth engine has a new face in this cycle, and this is transforming the composition of Europe’s productive fabric (see second chart). For instance, we can see how the broad-based dynamism of Spain – which accounts for over a quarter of the total growth of the EU in the last three years – has led to its relative weight increasing by more than half a point, reaching levels not seen since 2010. The growth of Denmark and Ireland re also noteworthy, as they account for almost 20% of Europe’s recent growth (three times more than their relative weight in the economy). As noted earlier, these economies have been supported by specific competitive advantages in certain high-growth sectors, such as ICT services. Finally, the bloc of Eastern European economies is also gaining prominence in the EU – a logical trend as they are expected to converge on the standards of the founding members. Nevertheless, their growth remains restrained and is penalised by their focus on economic activities that show relatively less dynamism, such as agriculture, construction and logistics services.