The European Commission regularly monitors and analyses the functioning of the EU single market for services. This page contains key economic reports and studies which inform the Commission's policies in this area.
CET Quarterly Report
Strategic dependencies
On 5 May 2021, the Commission updated the EU industrial strategy to take account of circumstances following the COVID-19 crisis and drive the transformation to a more sustainable, digital, resilient and globally competitive economy.
It highlighted the need for getting a better grasp of where the EU’s strategic dependencies lie, how they may develop in the future and the extent to which they would lead to vulnerabilities. In this context, the Chief Economist Team developed a supply chain intelligence 'hub', consisting of 3 complementary pillars.
The first pillar is about identifying our structural weaknesses. We have developed a state-of-the art methodology to map the EU’s strategic dependencies across sensitive industrial ecosystems. In addition, we carry out in-depth assessments of the EU’s exposure when it comes to individual non-EU countries (see our assessment of EU-China exposure) and dependencies of specific critical inputs or technologies (see our first and second in-depth reviews of strategic dependencies).
The second pillar is about monitoring and stress testing supply chains. We have developed an early warning system to monitor distress in supply chains ('SCAN'). In addition, we develop new methodologies allowing us to stress test critical supply chains (including in the context of our DG GROW fellowship scheme) and regularly consult European businesses on challenges and responses to supply chain distress (notably through a regular survey with the EIB).
A SCAN dashboard will be soon released. It will allow the user to examine at a 'click' the evolutions in prices and quantities of all raw materials behind prevalent technological designs for Net Zero technologies (EV batteries, fuel cells, solar panel, wind turbines) and detect anomalous variations both in prices and quantities, as proxies for supply chain distress.
With our third pillar, we try to stay on top of and evaluate shifting patterns in supply chains. We are assessing most recent evidence regarding ongoing re-, near- and/or friend-shoring of European supply chains. In addition, we try to understand possible costs of these changing configurations in supply chains (as well as ways to offset them).
Our supply chain methodologies are an important part of implementing provisions contained in relevant legislation – like the Chips Act or the Internal Market Emergency and Resilience Act. In addition, we have made significant progress in moving towards a 'common language' on supply chain risks with EU member countries (including in DG GROW's Chief Economists Network with Member States).
Supply chain shortages
While the EU gains resilience from being open and integrated in global supply chains, there are also associated risks likely to affect specific products that are particularly critical for the EU’s economy and society.
Given the increasing economic and societal impact of supply chain disruptions, monitoring the ever-evolving situation of EU supply chains is key to increase preparedness and resilience.
To address this need, we have developed the 'SCAN' (Supply Chain Alert Notification) monitoring system, leveraging high-frequency information from customs data. This system employs an indicator-based approach, enabling dynamic monitoring and early detection of distress signals within EU supply chains.
More precisely, SCAN uses quasi-real-time data on import quantities and prices to signal potential mismatches between supply and demand, allowing the detection of inflationary pressures and/or potential shortages.
SCAN has been employed for products belonging to the initial upstream segment (i.e. raw materials) of the supply chain of various green technologies (i.e. solar panels, electric vehicle batteries, fuel cells, wind turbines). Additionally, it has also been used as one of the monitoring tools in the 'EU Chips Act' to track products across various segments of the semiconductor supply chain.
Watch this space for the coming release of our SCAN Dashboard, which will allow you to use our SCAN methodology to capture and monitor supply chain distress at a disaggregated product level.
Furthermore, the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs has teamed up with the European Investment Bank (EIB) to gain more insights into the supply chains of EU firms. To that end, starting in 2023, the EIB complemented its annual EIB Investment Survey, which collects firm-level data on overall investment trends, with a dedicated survey module on supply chains, the Supply Chain Survey (SUCH). The results of the first SUCH wave were presented in a joint report in October 2024. A second report on the results of the 2024 survey is expected in mid-2025.
Reindustrialisation
The industrial structure of Europe is undergoing significant change in the face of a technological evolution towards green and digital technologies that will define the industries of the 21st century.
Recently, concerns have spread that Europe may be deindustrialising, mainly due to an unholy alliance of the war-induced hikes in energy prices together with several headwinds that already existed before.
In particular, the Chief Economist Team is undertaking research to analyse
- the green industrial business case and the impact of decarbonisation on industry (see Cameron and Garrone (2024)). A tool in this workstream is the matching between the EU Transaction Log (EUTL) and Moody’s Orbis database, which provides climate and financial metrics and is updated annually with Moody's permission.
- whether the ongoing structural changes lead to deindustrialisation and/or reallocation of industries within Europe (see preliminary results on the basis Industrial Production Indices (IPIs), as well as the interactive dashboard.
Other economic workstreams
In addition to our core analytical themes above, the Chief Economist Team undertakes economic modelling and analysis across many other relevant topics, including
- FIDELIO: economic modelling for Industrial policy and single market
- single market integration and competitiveness, including work by DG GROW Fellows
- members of CompNet - Competitiveness Research Network
FIDELIO is the result of a collaboration with the Joint Research Centre for the development and use of an industry model to conduct economic analysis, tailored to the needs of the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs.
In addition to its sectoral granularity and input-output interlinkages, FIDELIO will offer the possibility of capturing firms’ characteristics, such as size.
Economic monitoring
The Chief Economist team regularly monitors several key indicators relevant for industrial production and competitiveness, such as
- Confidence indicator for industrial ecosystems
- Decomposition of produce price inflation in Euro Area
European Innovation Scoreboard
The European innovation scoreboard (EIS) project provides a comparative analysis of innovation systems in EU countries, other European countries, and neighbours. The Chief Economist team is closely involved in the coordination and guidance of the project, under the leadership of the Directorate-General for Research and Innovation.
The project also covers the comparative assessment of innovation performance at the level of European regions under the Regional innovation scoreboard (RIS).
See the latest 2023 European and regional innovation scoreboards
Contact
grow-a1
ec [dot] europa [dot] eu (grow-a1[at]ec[dot]europa[dot]eu)