Annual Single Market and Competitiveness Report highlights challenges and opportunities to EU competitiveness

Today, the European Commission is publishing the 2025 Annual Single Market and Competitiveness Report analysing the strengths and weaknesses of the EU economy. It provides the analytical context for the Competitiveness Compass? an action plan that will reignite economic dynamism in Europe.

The report tracks the evolution of 22 key performance indicators, such as integration in the Single Market, Research and Development, expenditure and electricity prices. They are crucial for assessing the EU's competitiveness, identifying areas requiring special attention, such as completing the Single Market, closing the innovation gap, decarbonising industry, and reducing dependencies.

The main findings of the report are the following:

• The competitiveness of the EU economy faces mounting pressure from several angles, including high energy costs and overcapacities in third countries.
• The Single Market, home to 450 million consumers and 23 million companies, is at the core of the EU's long-term competitiveness. Nevertheless, persistent barriers in the Single Market hold it back from reaching its full potential. Regulatory burden is seen as an obstacle by two thirds of companies.
• Europe boasts stable investment spending, strong research activity and an ample talent pool. However, businesses struggle to scale up, Research and Development expenditure remains below peers and digitalisation progresses too slowly.
• Europe has a strong industrial base, but high energy prices weigh on its competitiveness. The decarbonisation of industry and energy systems as well as circularity is advancing but should accelerate.
• The EU maintains its position as the number one global exporter of services and number two exporter of goods. Still, strategic dependencies and non-market overcapacities in third countries merit careful monitoring.

For More Information

2025 Annual Single Market and Competitiveness Report