Seasonally adjusted services production across the European Union experienced a contraction in November 2025, according to Eurostat.

This monthly decline of 0.5 per cent in the EU and 0.6 per cent in the euro area follows a brief period of growth in October 2025, where both regions saw a marginal increase of 0.1 per cent.

The broader annual comparison remains slightly positive, with services production increasing by 0.3 per cent in the euro area and 0.2 per cent in the EU compared with November 2024.

Within the euro area, several key sectors faced downward pressure, including transportation and storage, which fell by 0.7 per cent, and professional, scientific, and technical activities, which dropped by the same margin.

Administrative and support services decreased by 0.6 per cent, while real estate activities saw a 0.3 per cent reduction during the month of November.

Both information and communication and the accommodation and food services sectors recorded slight monthly declines of 0.1 per cent in the euro area.

While parts of the continent struggled, the service sector in Cyprus showed a different trajectory as business confidence strengthened further in January 2026.

In services, business confidence strengthened further, supported by improved expectations, according to the Economics Research Centre of the University of Cyprus.

This local optimism in services helped to almost fully offset a marginal decline of 0.2 points in the broader Economic Sentiment Indicator, which was otherwise weighed down by retail and construction.

Expectations for turnover in the next quarter strengthened after two months of decline, while capacity utilisation in accommodation and food services remained stable at the highest level reached since the pandemic.

Across the broader EU, the transportation and storage sector faced the steepest annual decline, falling 1.6 per cent compared with the previous year.

Conversely, the information and communication industry showed significant resilience, with an annual production increase of 3.2 per cent in the euro area and 3.0 per cent in the EU.

Member state performance varied wildly, with Greece recording the largest monthly decrease at 6.0 per cent, followed by Denmark at 5.1 per cent and Hungary at 2.0 per cent.

In contrast, Bulgaria observed the highest monthly growth at 2.9 per cent, while Romania and Slovakia followed with increases of 2.3 per cent and 2.1 per cent respectively.

Annual figures also highlighted regional disparities, as Bulgaria saw a substantial 9.9 per cent increase in services production while Denmark suffered a 13.0 per cent contraction.

Despite the stable outlook for service turnover in Cyprus, business expectations regarding employment were revised downwards, although they remained fairly positive.

The January survey also pointed to near full utilisation of productive capacity in construction, with labour shortages constraining activity for a significant share of firms for several months.

Consumer confidence in Cyprus remained resilient and stable at the high level recorded in December 2025, even as expectations for the country’s general economic situation weakened slightly.