Data from Eurostat shows that the business investment rate in the EU increased to 22.5% in the EU (its highest rate since the 4th quarter of 2023), with the rate for the Euro-zone at 22.3% (this is the best rate since the 2nd quarter of 2023). The business profit share in the EU was unchanged at 39.3% but increased for the Euro-Zone to 38.9% (its highest rate for a year).
The gross investment rate of non-financial corporations is defined as gross fixed capital formation divided by gross value added – this ratio relates investment in fixed assets (buildings, machinery etc.) to the value added created during the production process. The profit share of non-financial corporations is defined as the gross operating surplus divided by gross value added. This shows the share of the value added created during the production process remunerating capital and it is the ratio of the share of wage costs (plus other taxes minus other subsidies on production) in value added.
While the issue of imports of intellectual property rights (mainly to Ireland) has generated peaks in the past, the sharp rise in the business investment rate, especially for the Euro-zone, in this data does not seem to be down to this issue. Rather, it comes because of a spike in gross fixed capital investment which meant that it grew faster than gross value added
For the profit share of non-financial corporations, the modest improvement in the Euro-zone was because gross value-added grew slightly faster than business compensation of employees (wages and social contributions) plus taxes and less subsidies on production. In the EU, the pace of growth in these two series was the same, hence the unchanged ratio. You can get the full details from the Eurostat News Release which can be downloaded from their website at https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Quarterly_sector_accounts_-_non-financial_corporations or on request from MTA.