The latest Eurostat quarterly sector accounts show that business investment strengthened across Europe during the first quarter of 2026, despite a decline in corporate profitability. The business investment rate increased from 21.7% to 22.2% in the euro area and from 22.2% to 22.6% across the EU, reflecting a +1.5% increase in gross fixed capital formation in the euro area.
In contrast, the business profit share fell from 39.7% to 38.6% in the euro area and from 40.2% to 39.1% across the EU, reflecting a -0.9% decline in business gross value added alongside a +0.9% increase in employee compensation and production taxes less subsidies during the quarter.
While profitability weakened, the increase in investment suggests that businesses continued to invest despite a more challenging earnings environment.
You can get the latest Eurostat data on European Investment and Profitability, published as “Quarterly sector accounts – non-financial corporations”, from their website at https://ec.europa.eu/eurostat/news/euro-indicators (27 July) or request it from MTA.