Growth, employment and the single market – why does it matter?
By removing cross-border barriers to the movement of goods, services, people and capital, the single market increases competition and helps allocate resources more efficiently. This helps increase the level and quality of growth and employment in the EU economy.
The indicators in this section measure the performance of the single market by looking at its growth both in terms of value added and employment. Important social indicators that look at the progress achieved in terms of type of employment (e.g. permanent or temporary), wage development and safety at work complement the performance analysis.
Growth
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Value added in industry
This indicator shows the trends in the annual percentage growth in the value added in industry, including construction, for the EU, China, Japan and the USA.
The chart shows the slow and steady growth in the value added in industry (except during the 2007-2008 financial crisis and the COVID-19 crisis). EU value added rebounded quickly in 2021 (by 6.6%), recovering from the COVID-19 crisis, and grew somewhat slower in 2022 (by 2.7%).
Over the past two decades, China’s industrial value-added growth was much higher than in the USA, Japan and the EU as its overall growth was high. On average, the growth in value added in industry has been slightly below growth in gross domestic product (GDP), reflecting steady deindustrialisation.
Source: World Bank, national accounts
Value added in services
This indicator shows the trends in the annual percentage growth in the value added in services for the EU, China, Japan and the USA.
EU value added in services fell during the COVID-19 crisis (by -5.6%) and then showed strong growth in 2021 and 2022 (by 5.1% and 4.2% respectively).
The chart shows value added in services has continuously grown since, except during the 2007-2008 financial crisis and the COVID-19 crisis. Over the past two decades, China’s value-added growth in services was much higher than in the USA, Japan and the EU as its overall growth was high. On average, the growth in value added in services is higher than in industry.
Source: World Bank, national accounts
Value added by size of business
This indicator measures the total value added at factor cost since 2008. Data are provided by business size (0-9 employees, 10-49, 50-249, 250+). Data for 2021-2023 are based on now-casts and forecasts on the basis of Eurostat structural business statistics and economic forecasts from the European Commission's annual macroeconomic (AMECO) database. Value added is expressed in current prices (trillion euro).
Value added growth in large businesses has been higher than for small and medium-sized enterprises (SMEs) in recent years.
The increases in 2022 are largely driven by the high-inflation environment; in real terms, value added decreased in 2022 (for further details, see the 2023 SME Performance Review).
Source: data for 2021-2023 are estimates produced by the Joint Research Centre, based on 2008-2020 figures from the structural business statistics database as well as provisional data for 2021-2022 from the national accounts database and the short-term business statistics database (all Eurostat). 2017-2018 saw a break in time series as Eurostat switched from enterprises as a legal unit to enterprises as a statistical unit, leading to some jumps particularly for large enterprises that were previously classed as separate legal units.
Gross domestic product per person employed
This indicator shows the trends in the annual growth rates of labour productivity per employee for the EU, UK, Japan and the US.
The graph reveals that labour productivity has grown over the past decades (except for falls caused by the 2007-2008 financial crisis and the COVID-19 pandemic). The difference between the USA and the EU during the COVID-19 crisis reflects different approaches to crisis mitigation. In 2020, the USA temporarily increased unemployment benefits, and companies reduced employment. In the EU, countries subsidised employment. This resulted in GDP per person employed falling substantially in the EU (and the UK) while remaining stable in the USA.
In 2022, EU productivity per employed person grew by 1.58%. Productivity growth is forecast to drop to about 0.47% in 2023 and reach 1.24% in 2024.
Source: AMECO (latest figures are estimates)
Share of high-growth businesses
This indicator measures the share of EU high-growth businesses, defined as businesses experiencing 10% annual employment growth rates within a 3-year period, excluding micro-enterprises. The share is calculated by dividing the number of high-growth businesses by the number of active businesses with at least 10 employees in the non-financial business economy (sectors NACE Rev. 2 B-N_X_K642).
Higher shares of high-growth businesses indicate a stronger ability of businesses to grow and create jobs.
In 2020, the EU share of high-growth businesses was slightly below 10%. The value has been decreasing since 2018.
Source: Eurostat, business demography, 2020 data
Employment and social indicators
Employment growth
This indicator shows the annual percentage growth in total employment for the EU, Japan, the USA and the UK.
In 2022, EU employment grew by 2%. Employment growth is forecast to drop to about 0.5% in 2023 and 0.4% in 2024.
EU annual employment shows higher growth then the UK or Japan but not the USA, which also exhibits higher volatility over time.
Source: AMECO. Figures for 2022, 2023 and 2024 are estimates.
Number of people employed by size of business
This indicator measures the total number of people employed since 2008. Data are provided by business size (0-9 employees, 10-49, 50-249, 250+). Data for 2021-2023 are based on now-casts and forecasts on the basis of Eurostat structural business statistics and economic forecasts from the Commission's AMECO database.
Employment growth in SMEs has been subdued in recent years. It only barely reached pre-COVID-19 levels in 2023.
Source: data for 2021-2023 are estimates produced by the Joint Research Centre, based on 2008-2020 figures from the structural business statistics database as well as provisional data for 2021-2022 from the national accounts database and the short-term business statistics database (all Eurostat). 2017-2018 saw a break in time series as Eurostat switched from enterprises as a legal unit to enterprises as a statistical unit, leading to some jumps particularly for large enterprises that were previously classed as separate legal units.
Adult employment rate
This indicator shows the EU trend in the employment rate of people aged 20 to 64 and compares the EU rate with other countries.
The employment rate measures the use of available labour resources and is affected by changes in the activity and unemployment rates. This indicator is sensitive to economic cycles and is also affected by policies, such as active labour market policies or income support, and inequalities of opportunities for disadvantaged groups. For individuals, employment is a source of income and promotes inclusion in society.
In 2022, the EU employment rate was 74.6%. The European Pillar of Social Rights sets three headline targets. One of them is that at least 78% of the population aged 20 to 64 should be in employment by 2030. The chart shows progress to this target despite a fall in employment during the COVID-19 crisis.
Employment rates in the EU and the USA follow a broad similar pattern, and rates in the UK and Japan remained higher between 2015 and 2022. (For international comparison purposes, the chart uses OECD data for non-EU countries. The definition of employed people might differ slightly and lead to slight differences in levels – see source below).
Sources:
- EU: Eurostat, Labour Force Survey, [lfsi_emp_a]
- Japan, UK, USA: OECD, Labour Force Survey, Table B1 - Employment/population ratios by selected age groups - Total, detailed information about definition of employment in the different countries
Permanent, temporary and self-employment
This indicator shows the change (in millions of people) in permanent, temporary and self-employment of people aged 15-64 compared with the same quarter of the previous year.
This chart shows year-on-year growth in all three employment categories. Although these categories tend to move in parallel, the impact of the COVID-19 crisis clearly harmed temporary workers more than the others. The latest data reveals that EU employment grew by 2.7 million new jobs in the first quarter of 2023 compared with the first quarter of 2022. This growth was driven mostly by an increase in permanent employment. Previously, in the last quarter of 2022, EU employment had grown by 2.9 million jobs year-on-year, with most of these being permanent positions as well.
Source: EU Labour Force Survey
Employment by gender
This indicator shows the employment rate of the population of working age (20-64 years) by gender (left axis) and the gap between males and females (right axis).
The chart shows the steady increase in the employment rates of working-age women (almost 70%) and men (80%) since the end of the 2007-2008 financial crisis. Men are employed at higher rates although the difference has been slowly declining and reached 11% in 2022.
Source: Eurostat
Adult participation in education and training every year
This indicator measures the share of adults (25-64 years) that have taken part in an organised learning activity in the 12 months before the survey. These learning activities can encompass formal education and training in institutions or activities in non-formal settings such as in-company training and training purchased on the market or provided by local authorities or other bodies.
The EU leaders welcomed in 2021 the target, proposed in the European Pillar of Social Rights Action Plan, of 60% of adults participating in learning by 2030, with each Member State setting a national target.
The EU Labour Force Survey (LFS) and the EU Adult Education Survey (AES), both coordinated by Eurostat, ask adults about participation in learning, with slightly different definitions. The LFS is carried out every 2 years (as of 2022), the AES every 6 years (latest 2016). The chart is based on a special extraction from the 2016 AES. Data from the 2022 AES are gradually being published, while data from the 2022 LFS will be released in spring 2024.
The chart shows a large difference in the rate across countries, with 5 countries above 50% and 3 around 10% or less. The EU average is at 37.4%, meaning that about one adult in three participates in learning over one year. This falls short of meeting the need to keep the EU workforce sufficiently skilled to harness the digital and the green transitions, which are changing the labour market and the skill sets required.
Source: Eurostat, 2016 EU Adult Education Survey
Wage levels and development
This indicator measures annual net earnings in purchasing power standard for people earning 100% of the average earnings of a specific category of households.
The left chart provides data for the EU, the USA, the UK and Japan.
The right chart details the EU growth rates for the three categories of households.
The chart shows improvements to the different categories of earners’ wage levels over time in the EU (single person with no children, one-earner couple with two children and two-earner couple with two children). However, they are somewhat lower on average compared with the UK, Japan and the USA. Nevertheless, compared with 2014, the three categories of EU families earn more: 21.3%, 20.3% and 21.5% respectively.
International comparison
EU growth rates since 2014
Source: Eurostat
Health and safety at work
This indicator shows the percentage of active population employed or previously employed who are affected by accidents at work (left chart) and work-related health problems (right chart).
The charts show the EU average and the figures for the EU countries with the smallest (min) and the largest (max) values.
The chart reveals a big difference between accidents at work and work-related health problems as well as methodological differences.
Accidents at work have fallen by a third over the last 15 years, reaching just over 2%. Work-related health problems have experienced a similar decline, but they have unfortunately increased slightly in recent years, reaching just over 10%.