Business Registrations Increase Across Most Sectors
The European economy showed mixed signals in the second quarter of 2025 as business registrations increased but bankruptcy declarations also edged higher. According to Eurostat, registrations of new businesses across the European Union rose by 4.6% compared with the first quarter of 2025. This growth points to renewed optimism among entrepreneurs and investors, who appear more confident about the region’s economic prospects despite persistent challenges.
The increase in business activity suggests that companies are finding opportunities in evolving markets, especially in areas such as technology, finance, and transport. The rebound in registrations highlights a strong appetite for innovation and expansion, even as global uncertainties remain.
Strongest Growth in Transport, ICT, and Finance
Breaking down the numbers reveals significant differences across sectors. The transport sector recorded the sharpest increase in new business registrations, climbing by 13.1%. This surge reflects strong demand in mobility services, logistics, and infrastructure support, all of which are crucial as trade flows expand and supply chains continue to adjust.
The information and communication sector also recorded impressive growth of 8.2%, underscoring the ongoing digital transformation across the EU. Financial services followed with a 5.2% increase, reflecting growing demand for fintech solutions, alternative lending, and investment services. These sectors not only drive economic growth but also represent long-term structural trends shaping the European economy.
Industry Sector Records No Change
While most sectors enjoyed growth, the industrial sector showed no change in new registrations compared with the previous quarter. This stagnation signals that challenges such as high energy costs, geopolitical uncertainties, and environmental regulations continue to weigh heavily on industrial operators.
Unlike digital and service-based industries, which can adapt quickly to market shifts, industrial firms often require longer-term investment and stable conditions to thrive. The lack of movement in this sector suggests that it may take longer for manufacturers and heavy industries to regain momentum as they navigate ongoing headwinds.
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Bankruptcies Rise by 1.7% in Q2 2025
Despite the increase in business registrations, bankruptcy declarations also rose in the second quarter, climbing 1.7% compared with the previous quarter. This figure indicates that while new businesses are being created, existing firms continue to struggle under the weight of high costs, debt burdens, and competitive pressures.
Rising bankruptcies can have broader implications for employment, supply chains, and investor confidence. The increase underscores the uneven nature of the recovery, where some sectors thrive while others continue to face significant financial distress.
Mixed Sectoral Trends in Bankruptcies
Bankruptcy trends varied widely across sectors, highlighting the unevenness of the current economic landscape. Information and communication experienced the highest increase in bankruptcies at +13.6%, a surprising figure given the sector’s strong performance in registrations. This suggests that while new digital companies are entering the market, existing firms may be struggling with competition, scaling costs, or shifting consumer demand.
Construction also recorded a significant rise in bankruptcies at +8.1%, reflecting continued cost pressures, labour shortages, and project delays. In contrast, the accommodation and food services sector saw a 7.5% decline in bankruptcies, while trade recorded a 3.7% decrease. These contrasting movements suggest that sectors tied to consumer spending and tourism are benefiting from post-pandemic recovery, while capital-intensive industries face ongoing strain.
Transport Sector Shows Dual Signals
The transport sector presents a particularly interesting case in Q2 2025. On one hand, it led the way in business registrations, surging by 13.1%. On the other hand, rising operational costs, labour shortages, and environmental regulations continue to create challenges for operators.
While the surge in new registrations points to strong investor confidence and a growing market, the sector’s long-term performance will depend on how effectively new and existing businesses can navigate these constraints. This dual trend captures the broader theme of the quarter: opportunity and risk coexisting side by side in Europe’s business environment.
Broader Implications for EU Economic Outlook
The Q2 2025 data paints a nuanced picture of the European economy. On the one hand, rising business registrations show that entrepreneurs remain optimistic, capitalising on opportunities in technology, transport, and financial services. On the other hand, the increase in bankruptcies highlights persistent vulnerabilities in key sectors, particularly construction and ICT.
For policymakers, this duality presents both an opportunity and a challenge: how to support innovation and growth while ensuring struggling businesses receive the necessary tools to survive. As the EU moves further into 2025, the balance between fostering new growth and addressing structural weaknesses will be central to sustaining long-term economic stability.
