Archive:The EU in the world - business

This Statistics Explained online publication has been archived. The latest edition, Key figures on the EU in the world – 2023 edition, can be found on the Eurostat website.

Data extracted in January and February 2020.

Planned article update: February 2023.

Highlights

Services accounted for four fifths (80%) of value added in the United States and the United Kingdom in 2018; in the EU, the share was 73%.

In Japan, the United Kingdom and Brazil, industrial output in 2018 had still not returned to the levels before the financial and economic crisis.

Among the G20 members, Turkey recorded the largest receipts from tourism relative to GDP in 2017.

International tourism receipts, 2007 and 2017
(% of GDP)
Source: the World Bank (World Development Indicators)

This article is part of a set of statistical articles based on Eurostat’s publication The EU in the world 2020. It focuses on industrial and service activities in the European Union (EU) and the 16 non-EU members of the Group of Twenty (G20). The article uses short-term business statistics (STS), structural business statistics (SBS) and tourism statistics to give an insight into the EU’s business economy in comparison with (most of) the major economies across the rest of the world, such as the EU’s counterparts in the so-called Triad — Japan and the United States — and the BRICS composed of Brazil, Russia, India, China and South Africa.

Full article

Structure of the economy

Figure 1 illustrates the economic structure in the G20 economies, using national accounts data to group economic activities into five broad headings based on the ISIC Rev.3 classification.In 2018, services contributed at least 70 % of the total gross value added in the economies of the United States, the United Kingdom, Brazil, the EU-27, Canada, Australia and Japan — see Figure 1. In all of the other G20 countries, services was also the largest of the five activity groupings shown and accounted for more than half of total gross value added except in Saudi Arabia (48.1 %) and Indonesia (45.2 %). Manufacturing was the second largest activity in value added terms in most of the G20 members. Exceptions were Saudi Arabia, Australia and Russia where mining and utilities was the second largest activity. India and Indonesia were the only G20 members where agriculture, hunting, forestry, fishing contributed more than one tenth of total gross value added and Indonesia was the only one where construction contributed more than one tenth of total gross value added.

Figure 1: Gross value added by economic activity, 2018
(% of total gross value added)
Source: the United Nations Department of Economic and Social Affairs, Statistics Division (Analysis of Main Aggregates)

Figure 2 focuses on industrial activities, including mining and quarrying, manufacturing and utilities. The data show the share of industrial employment in enterprises of different size classes. These size classes are defined in terms of the number of persons employed and range from micro enterprises with less than 10 persons employed to large enterprises with 250 or more persons employed. Collectively, the enterprises which are not large are often referred to as small and medium-sized enterprises (SMEs).

Figure 2: Enterprise size class shares of industrial employment, 2017
(% of the total number of persons employed)
Source: Eurostat (sbs_sc_sca_r2) and the OECD (SDBS structural business statistics (ISIC Rev. 4))

Large enterprises generally have higher labour productivity than SMEs and so their share of industrial employment tends to be lower than their share of value added. Across the EU-27, large enterprises employed 46.1 % of the total industrial workforce in 2017. The lowest employment shares for large enterprises were observed in South Korea (definition differs) and Turkey, with shares just over one quarter and one third respectively. Japan (2016 data; definition differs), Australia (2016 data; definition differs) and the United Kingdom all recorded employment shares within the industrial workforce for large enterprises that were similar to that in the EU-27 and under half. Elsewhere the share ranged from 50.0 % in Brazil (2014 data) and 52.1 % in Canada (2016 data; definition differs) to 65.2 % in the United States (2015 data; definition differs) and 85.2 % in Russia (definition differs).

Short-term business statistics

The line graphs presented in Figures 3 and 4 illustrate developments for the industrial production index and for the domestic industrial output price index. The indices presented are calculated from annual indices but the underlying series are normally monthly or quarterly data which facilitate a rapid assessment of the economic climate. These figures show the developments for the G20 members; for ease of readability these figures have been presented in several parts with the EU-27 shown in all parts for the purpose of comparison.

In four G20 members industrial output in 2018 had still not yet returned to pre-crisis levels

For the industrial production index the time series shown starts in 2006 in order to illustrate the impact of the global financial and economic crisis. The impact of the crisis on industrial activities and the subsequent recovery was substantial in several G20 members and this is reflected in the time series shown. Four of the G20 members — Japan, the United Kingdom, Brazil and South Africa — had lower levels (in real terms) of industrial output in 2018 (latest data are for 2017 for South Africa) than they had at their pre-crisis peak: 2007 for South Africa, Japan and the United Kingdom, 2008 for Brazil. In Brazil, industrial output in 2018 was 11.6 % lower than it had been in 2008. By comparison, 2018 was the first year that the level of industrial output in the EU-27 was higher (by 0.9 %) than it had been in 2007, which was the pre-crisis peak level of output. Turning to the G20 members that experienced rapid industrial growth during the years shown in Figure 3 — South Korea, Indonesia, Turkey and India — only Turkey recorded an actual fall in output during the crisis, whereas the others experienced a slowdown in industrial activity. After falls in 2008 and 2009, Turkey’s industrial output rebounded in 2010 to surpass the 2007 peak and by 2018 Turkish industrial output was 66.5 % higher than it had been in 2007. Over a comparable period, in other words between 2007 (after which growth slowed for a year or two) and 2018, industrial output increased by 37.7 % in South Korea, 58.0 % in Indonesia (manufacturing only) and 66.5 % in India.

Looking at just the latest annual rates of change, between 2017 and 2018, Indonesia recorded the fastest growth in industrial production, up 5.5 %, just ahead of India (5.2 %) and the United States (4.1 %). All G20 members recorded growth in industrial output in 2018; in the EU-27, an increase of 1.3 % was observed.

Figure 3: Industrial production index, 2006-2018
(2006 = 100)
Source: Eurostat (sts_inpr_a), the International Monetary Fund (International Financial Statistics) and the OECD (Main economic indicators)

The domestic industrial producer price index is a business cycle indicator whose objective is to measure the development of transaction prices of industrial activities within the domestic market. For this indicator the time series shown starts in 2007, again in order to illustrate the impact of the global financial and economic crisis — prices continued to rise during the early stages of the crisis and it was not until 2009 that there was a slowdown or fall in prices. As such, whereas output generally peaked in 2007, prices generally peaked in 2008.

As was the case for production, not all of the G20 members recorded an actual fall in industrial producer prices during the crisis: Mexico and Turkey recorded increases every year during the period from 2007 to 2019. All of the other G20 members shown in Figure 4 recorded a fall in prices between 2008 and 2009. Japan was the only G20 member that still had lower domestic industrial producer prices in 2019 than at the peak level early in the crisis: industrial prices in Japan were 2.5 % lower in 2019 than they had been in 2008, equivalent to an average fall of 0.2 % per year. Comparing the peak price level in 2008 with 2019, increases were relatively subdued — less than 20 % overall and at most 1.6 % per year on average — in South Korea, the EU-27, the United States, Canada, Australia ^[1] and the United Kingdom. Elsewhere, average domestic industrial producer prices rose between 2008 and 2019 more rapidly, ranging from 4.5 % per year in Mexico to 9.9 % in Turkey. The latest annual rates of change (2019 compared with 2018) confirm that industrial producer prices rose at a rapid pace in Turkey, up 17.6 %, followed at some distance by an increase of 10.2 % in South Africa, while prices fell slightly in Canada and South Korea.

Figure 4: Industrial producer price index (domestic), 2007-2019
(2007 = 100)
Source: Eurostat (sts_inppd_a) and the OECD (Main economic indicators)

Tourism

A tourist (also known as an overnight visitor) is a visitor who stays at least one night in collective or private tourist accommodation in a specified geographical area. Tourists include residents (domestic tourists) and non-residents (international tourists), regardless of the purpose of travel, including people travelling for business, pleasure or other reasons. Note that international tourists are classified according to their country of residence, not according to their citizenship. As such, citizens residing abroad who return to their country of citizenship on a temporary visit are included as international tourists, although in practice not all countries follow this approach.

The number of tourists arriving in the EU-27 (from within or outside of the EU) increased by more than one third between 2007 and 2017

There were around 1.34 billion international tourist arrivals worldwide in 2017, among which 485 million were in the EU-27 (see Map 1): note that this EU-27 total includes arrivals in EU Member States of tourists from other Member States. As such, the EU-27 received 36.2 % of all international tourist arrivals worldwide, more than half the 67.3 % share received by all G20 members. The next largest G20 tourism markets in terms of international tourist arrivals were the United States (77 million arrivals, 5.7 % of the world total) and China (61 million, 4.5 %). Shares between 2 % and 3 % were observed for Mexico, the United Kingdom, Turkey and Japan.

Map 1: International tourist arrivals at frontiers, 2017
(%)
Source: the World Bank (World Development Indicators)

Relative to population size, there were 1 087 international tourist arrivals per 1 000 inhabitants in the EU-27 (including intra-EU arrivals) in 2017, by far the highest ratio among the G20 members, nearly double the next highest ratios which were around 570 per 1 000 inhabitants in the United Kingdom and Canada and more than six times the world average of 179 per 1 000 inhabitants (see Figure 5). Most of the remaining G20 members received between 150 and 490 international tourist arrivals per 1 000 inhabitants in 2017, with some of the G20’s most populous countries — Indonesia, China, Brazil and India — well below this range.

Figure 5: International tourist arrivals at frontiers, 2007 and 2017
(number per 1 000 inhabitants)
Source: Eurostat (demo_gind) and the World Bank (World Development Indicators)

Between 2007 and 2017, the number of international arrivals in the EU-27 of tourists (including intra-EU arrivals) relative to the size of the population increased by 34 % from 809 per 1 000 inhabitants to 1 087 per 1 000 inhabitants. Worldwide, the number of international tourist arrivals relative to population size increased by 30 % between these years. Japan’s ratio increased greatly, more than trebling, while the ratio of international tourist arrivals to population more than doubled in India and Indonesia. In the United States, Turkey, Brazil, the United Kingdom, Saudi Arabia, China, Russia and Canada, growth for this ratio that was below the world average, while the ratio fell 2.5 % in South Africa.

In 2017, Turkey recorded the largest receipts from tourism relative to GDP among the G20 members

Tourism is crucial for many countries, offering employment opportunities and a considerable revenue stream; this is particularly true for a number of developing and emerging economies which have been transformed by a growth in tourism.

International tourism receipts include payments (and prepayments) in a country by international tourists, including payments to domestic carriers for international transport. International tourism receipts worldwide were valued at EUR 1.35 trillion in 2017, among which EUR 395 billion were in the EU-27 (see Map&nbsp2): note that this EU-27 total includes not only receipts from outside of the EU, but also receipts from intra-EU tourism. As such, the EU-27 received 29.3 % of all international tourism receipts worldwide, more than the share received by any of the other G20 members, which collectively received 39.4 % of the world total. The next largest G20 tourism market in terms of international tourism receipts was the United States (16.5 % of the world total). Shares between 2.1 % and 3.4 % were observed for the United Kingdom, Australia, Japan, China and Turkey.

Map 2: International tourism receipts, 2017
(%)
Source: the World Bank (World Development Indicators)

These international tourism receipts were valued at 3.7 % of gross domestic product (GDP) in Turkey, 3.3 % in Australia, 3.0 % in the EU-27 (including extra- and intra-EU receipts) and 2.8 % in South Africa, the highest such ratios in 2017 among the G20 members (see Figure 6). In most of the other G20 members, international tourism receipts ranged from 0.8 % to 2.2 % of GDP, although Brazil and China (both 0.3 %) were below this range; the world average was 1.9 %.

Figure 6: International tourism receipts, 2007 and 2017
(% of GDP)
Source: the World Bank (World Development Indicators)

Between 2007 and 2017, the ratio of international tourism receipts to GDP increased by 0.1 points worldwide and by 0.5 points in the EU-27. Among the non-G20 members this ratio fell in Argentina (0.9 points), China (down 0.8 points) and South Africa (down 0.6 points) while it was relatively unchanged (an increase or decrease of at most 0.1 points) in Brazil, Russia, Canada, Indonesia and India. Growth in this ratio was strongest in Japan, Saudi Arabia, Turkey (all up 0.5 points) and Mexico (up 0.6 points). In relative terms, the largest increase was in Japan, where international tourist receipts more than doubled from 0.3 % of GDP in 2007 to 0.8 % in 2017. The largest relative decrease was in China, where GDP growth outstripped the growth in international tourism receipts such that the ratio in 2017 (0.3 %) was just over one quarter of its level in 2007 (1.0 %).

Source data for tables and graphs

Business: tables and figures

Data sources

The statistical data in this article were extracted during January and February 2020.

The indicators are often compiled according to international — sometimes worldwide — standards. Although most data are based on international concepts and definitions there may be certain discrepancies in the methods used to compile the data.

EU data

Most of the indicators presented for the EU and the United Kingdom have been drawn from Eurobase, Eurostat’s online database. Eurobase is updated regularly, so there may be differences between data appearing in this article and data that is subsequently downloaded. Some of the data have been extracted from international sources for reasons of comparability or availability.

G20 members from the rest of the world

For the non-EU G20 members other than the United Kingdom, the data presented have been compiled by a number of international organisations, namely the OECD, the International Monetary Fund, the United Nations Industrial Development Organisation and the World Bank. For some of the indicators shown a range of international statistical sources are available, each with their own policies and practices concerning data management (for example, concerning data validation, correction of errors, estimation of missing data, and frequency of updating). In general, attempts have been made to use only one source for each indicator in order to provide a comparable dataset for G20 members.

Context

Industrial activities such as manufacturing are integrated with many service activities such as transport and communications, distribution and business services, which in turn depend on industry to produce the equipment and hardware they use. Creating a positive climate in which entrepreneurs and businesses can flourish is considered by many as the key to generating growth and jobs; this is all the more important in a globalised economy, where some businesses have considerable flexibility to select where they operate.

The EU is a major tourist destination, with five of its Member States and one of its candidate countries among the world’s top dozen destinations for international tourists in 2017. Equally, 9 of the 19 individual G20 members were in the top dozen destinations, along with Spain and Austria that are EU Member States; the top 12 was completed by Thailand. Tourism has the potential to contribute towards employment and economic growth, especially in rural, coastal, peripheral or less-developed areas.

Notes

↑ The data for Australia, Canada and the United States only cover manufacturing and relate to a total rather than domestic producer price index.