Businesses in the manufacturing sector

Data extracted in January 2025

Planned article update: January 2026

Highlights

2.2 million enterprises employed 30 million persons in the EU's manufacturing sector in 2022.

The manufacturing sector contributed to one-quarter of the EU's business economy net turnover, with €9.8 trillion in 2022, an increase of 18% compared with 2021.

Sectoral analysis of employment by enterprise size class, manufacturing (NACE Section C), EU, 2022
(% share of sectoral employment)
Source: Eurostat (sbs_sc_ovw)

This article presents an overview of statistics for the European Union's (EU) manufacturing sector, as covered by NACE Rev. 2 Section C. It belongs to a set of statistical articles on 'Business economy by sector'.

The manufacturing sector includes a vast range of activities and production techniques, from small-scale enterprises using traditional production techniques, such as the manufacture of musical instruments, to very large enterprises at the top of a high and broad pyramid of parts and components suppliers collectively manufacturing complex products, such as aircraft. An analysis of the manufacturing sector as a whole gives an idea of the scale of this sector. It should be noted, however, that indicators of its inputs (for example, labour or capital goods), its performance, or its size structure are effectively an average across very different activities. While this can also be said of other large and diverse sectors, such as distributive trades and transport services, the manufacturing sector is 1 of the most varied activity within the business economy at the NACE section level of detail.

Structural profile

6.7% of all enterprises in the EU's business economy (Sections B to N and P to R, as well as Divisions S95 and S96) were classified as 'Manufacturing' (Section C) in 2022, a total of more than 2.1 million enterprises.

The manufacturing sector employed around 30.0 million persons in 2022 and generated €2.4 trillion of value added. By these 2 measures, manufacturing was the largest of the NACE sections within the EU's business economy in terms of its contribution to employment (18.7%), as well as the largest contributor to the business economy value added with share of (24.1%). In terms of turnover, the manufacturing sector had the 2nd highest net turnover within the EU's business economy after distributive trades, recording €9.8 billion, an increase of 18.3% compared with the previous year.

Table 1: Key indicator, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_ovw_act)

In 2022, the EU's manufacturing sector recorded apparent labour productivity and average personnel costs (average employee benefits expense) above business economy averages: the apparent labour productivity of the manufacturing sector was €80 600 per person employed, some €17 900 more than the business economy average (€62 700 per person employed), while average personnel costs in the manufacturing sector were €48 100 per employee, some €7 000 above the business economy average (€41 100 per employee). Combining these 2 ratios into the wage-adjusted labour productivity ratio shows that value added per person employed in the EU's manufacturing sector was equivalent to 167.6% of average personnel costs per employee, which was slightly above the average for the business economy (152.6%).

The gross operating rate (the relation between the gross operating surplus and turnover) was 10.8% for the EU's manufacturing sector in 2022, slightly below the 11.8% average for the business economy. This sector had the 3rd lowest gross operative rate among any of the NACE sections within the business economy (10.8%), only distributive trades and electricity, gas, steam and air conditioning supply sector had a lower gross operative rate (6.4% and 6.1%, respectively).

Sectoral analysis

At the NACE division level the manufacturing sector is composed of 24 different subsectors. The largest EU subsector in 2022 (for which there is available data) in terms of value added was the manufacture of machinery and equipment (Division 28), followed by manufacture of motor vehicles, trailers and semi-trailers (Division 29) and manufacture of food products (Division 10). In terms of employment, the largest EU subsectors were manufacture of food products, manufacture of fabricated metal products, except machinery and equipment (Division 25) and manufacture of machinery and equipment— see Figure 1.

Figure 1: Sectoral analysis of manufacturing (NACE Section C), EU, 2022
(% share of sectoral total)
Source: Eurostat (sbs_ovw_act)

Manufacturing subsectors are very diverse, combining activities with very high turnover (over 1.2 trillion), such as the manufacture of motor vehicles, trailers and semi-trailers and the manufacture of food products, with other activities that have lower net turnover, such as manufacture of tobacco products (Division 12) and manufacture of leather and related products (Division 15)— see Table 2a.

Table 2a: Sectoral analysis of key indicators, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_ovw_act)

Table 2b: Sectoral analysis of key indicators, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_ovw_act)

In 2022, among the available data, apparent labour productivity within the EU's manufacturing subsectors ranged from €29 700 per person employed or more for the manufacture of wearing apparel (Division 14) to €483 500 per person employed for the manufacture of coke and refined petroleum products (Division 19), see Table 2b.
Based on the available data, the manufacture of wearing apparel and manufacture of leather and related products recorded the lowest average employee benefits expense in the EU's manufacturing sector, at €22 100 per employee and €29 500 per employee respectively. The highest average employee benefits expense among the manufacturing sector was €82 300 per employee, registered by the subsector manufacture of coke and refined petroleum products, followed by manufacture of basic pharmaceutical products and pharmaceutical preparations (€80 000 per employee).

Country overview

Because of the tradable (export and import) nature of manufactured goods, the relative importance of manufacturing within the business economy varies greatly between EU countries. Specialisations at the subsector level are also sometimes very pronounced. Figure 2 shows that the share of manufacturing within the business economy's value added varied in 2022 from 6.6% in Luxembourg and 8.1% in Malta to more than 32.9% of the total in Slovenia and 33.5% of the total in Czechia and 41.5%, the highest share, in Ireland. The range in employment terms ranged from 8.7% in Luxembourg and 8.8% in the Netherlands to 30.4% in Czechia.

Figure 2: Relative importance of manufacturing (NACE Section C), EU, 2022
(% share of value added and employment in the business economy total)
Source: Eurostat (sbs_ovw_act)

Among the 5 largest EU countries, Germany stood out as its manufacturing sector contributed to almost one-third (32.0%) of the EU's value added in 2022, above its 29.3% share of value added in the EU's business economy as a whole. Italy recorded the 2nd share (12.7%) of the value added generated in the EU's manufacturing sector and 3rd share in the business economy as a whole (10.5%), while France recorded the 3rd share (11.4%) of the value added generated in the EU's manufacturing sector and 2nd share in the business economy as a whole (14.5%).

Figure 3: Concentration of value added and employment, manufacturing (NACE Section C), EU, 2022
(cumulative share of the 5 principal Member States as a % of the EU total)
Source: Eurostat (sbs_ovw_act)

Table 3: Largest and most specialised EU Member States in manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_ovw_act)

In value added terms, Germany was the largest EU country in 20 of the 24 manufacturing subsectors (see Table 3) in 2022; Italy was largest in 3 (the textiles, wearing apparel, and leather and related products manufacturing subsectors); France was the largest for the manufacture of other transport equipment. In Slovakia, the specialisation rate for the manufacture of motor vehicles, trailers and semi-trailers was very high and amounted to 12.1% of business economy value added. Equally remarkable was the Latvian specialisation rate (11.1% of business economy value added) for manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials (Division 16). Among the EU countries, the highest turnover in manufacturing was recorded in Germany (€2.8 trillion). The 2nd and 3rd highest values in net turnover for the manufacturing sector were recorded in Italy (€1.3 trillion) and France (€1.2 trillion). The same order was kept for employment, value added and gross investment in tangible non-current assets.
Denmark recorded the highest level of average employee benefits expense within the manufacturing sector in 2022, €75 100 per employee, above the EU average of €48 100 per employee. Average employee benefits expense were also greater than or equal to €50 000 per employee in Belgium, the Netherlands, Austria, Germany, Sweden, Luxembourg, France, Finland and Ireland. On the other hand, average personnel costs were below €15 000 per employee in Romania and Bulgaria where the lowest levels were recorded. Combining these 2 indicators gives the wage-adjusted labour productivity ratio, which is a measure of labour productivity that takes into account the very different levels of pay and social charges between EU countries and activities. The highest such ratios were recorded in Ireland (1 171.2%), Hungary (206.5%), Poland (203.2%), Belgium (193.7%) and the Netherlands (192.9%). The lowest wage-adjusted labour productivity ratios in manufacturing were registered in France (137.5%), Sweden (143.0%), Austria (147.3%), and Germany (145.8%).

Table 4a: Key indicators, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_ovw_act)

Table 4b: Key indicators, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_ovw_act)

Size class analysis

Large enterprises (employing 250 or more persons) contributed more to the EU's manufacturing sector than is typical for the business economy as a whole. In 2022, some 66.0% of the manufacturing sector's value added was generated by large enterprises and these employed 48.3% of the manufacturing employment. For comparison, the business economy average for SMEs was 33.9% share of value added and a 51.7% share of the employment.

Table 5: Key size class indicators, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_sc_ovw)

Among the 4 size classes, large enterprises (employing 250 or more persons) dominate in terms of employment in the majority of the subsectors in 2022. The highest shares were concentrated in the manufacture of coke and refined petroleum products (91.4%), of motor vehicles, trailers and semi-trailers (86.8%), basic pharmaceutical products and pharmaceutical preparations (86.5%) and tobacco products (86.2%). Micro enterprises (employing less than 10 persons) contributed to the largest share of employment among the 4 size classes for which data is available in manufacture of wood and of products of wood and cork, except furniture (27.9%), manufacture of wearing apparel (27.1%), and other manufacturing (26.9%), see Figure 4.

Figure 4: Sectoral analysis of employment by enterprise size class, manufacturing (NACE Section C), EU, 2022
(% share of sectoral employment)
Source: Eurostat (sbs_sc_ovw)

Large enterprises (employing 250 or more persons) contributed to the largest share of value added among the 4 size classes in most of the manufacturing subsectors for which data is available, the highest shares being recorded in the manufacture of coke and refined petroleum products (91.4%) and of motor vehicles, trailers and semi-trailers (86.8%). In terms of absolute values, the subsector of manufacture of machinery and equipment recorded the highest value added among all the manufacturing subsectors, followed by the manufacture of motor vehicles, trailers and semi-trailers.

Figure 5: Sectoral analysis of value added by enterprise size class, manufacturing (NACE Section C), EU, 2022
(% share of sectoral value added)
Source: Eurostat (sbs_sc_ovw)

Among the EU countries, the relative significance of large enterprises was at its greatest in Ireland in 2022, as these enterprises contributed to 84.5% of the large enterprises total value added generated in the manufacturing sector. Value added for large enterprises recorded on EU level (66.0%) indicates high significance of large enterprises in the sector.

Medium-sized enterprises made a considerable contribution to manufacturing value added in Estonia with 41.7% of the total value added for this size-class; while this contribution was only around 7.6% in Ireland and 12.7% in France.

Table 6a: Number of persons employed by enterprise size class, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_sc_ovw)

Table 6b: Value added by enterprise size class, manufacturing (NACE Section C), EU, 2022
Source: Eurostat (sbs_sc_ovw)

Source data for tables and graphs

Businesses in the manufacturing sector - 2022 data

Data sources

Eurostat's structural business statistics describe the structure, conduct and performance of economic activities, down to the most detailed activity level (several hundred sectors). Without this structural information, short-term data on the economic cycle would lack context and would be more difficult to interpret. Coverage

Structural business statistics cover the 'business economy', which includes industry, construction and many services (NACE Rev. 2 sections B to N, P to R as well as division S95 and S96). Structural business statistics do not cover agriculture, forestry and fishing, nor public administration. Structural business statistics describe the business economy through the observation of units engaged in an economic activity; the unit in structural business statistics is generally the enterprise. An enterprise carries out 1 or more activities, at 1 or more locations, and it may comprise 1 or more legal units. Enterprises that are active in more than 1 economic activity (plus the value added and turnover they generate, the people they employ, and so on) are classified under the NACE heading corresponding to their principal activity; this is normally the 1 which generates the largest amount of value added.

Manufacturing includes the physical or chemical transformation of materials, substances, or components into new products. The raw materials are products of agriculture, forestry, fishing, mining or quarrying as well as products of other manufacturing activities. Substantial alteration, renovation or reconstruction of goods is generally considered to be manufacturing. Selling to the general public products that have been made on the same premises from which they are sold, such as bakeries and custom tailors, is also included in manufacturing rather than retailing.

Manufacturing units may process their own materials, subcontract a part of the processing of their own materials, own legal rights and concepts of the product but subcontract the whole processing, or carry out the aforementioned subcontracted processes. Assembly of the component parts (whether self-produced or purchased) of manufactured products is also considered manufacturing. The output of a manufacturing process may be finished in the sense that it is ready for use or consumption, or it may be semi-finished in the sense that it is to become an input for further manufacturing.

Specialised installation, maintenance and repair of industrial, commercial and similar machinery and equipment is considered as part of manufacturing, however the repair of computers and personal and household goods is classified as a service (Division 95), while the repair of motor vehicles is classified as part of distributive trades (Section G).

Some transformation processes are not classified as manufacturing: logging is classified in forestry (Section A); materials recovery is considered as primarily waste processing (Section E); on-site construction of structures which is classified as part of construction (Section F); activities of breaking bulk and redistribution (including, for example, packaging, bottling or sorting) are classified to distributive trades.

Data sources

The analysis presented in this article is based on the main dataset for structural business statistics (SBS), size class data and regional data, all of which are published annually.

The main series provides information for each EU Member State as well as a number of non-EU member countries at a detailed level according to the activity classification NACE. Data are available for a wide range of variables.

In structural business statistics, size classes are generally defined by the number of persons employed. A limited set of the standard structural business statistics variables (for example, the number of enterprises, turnover, persons employed and value added) are analysed by size class, mostly down to the 3-digit (group) level of NACE. The main size classes used in this article for presenting the results are:

small and medium-sized enterprises (SMEs): with 1 to 249 persons employed, further divided into;
- micro enterprises: with less than 10 persons employed;
- small enterprises: with 10 to 49 persons employed;
- medium-sized enterprises: with 50 to 249 persons employed;
large enterprises: with 250 or more persons employed.

Structural business statistics also include regional data. Regional SBS data are available at NUTS levels 1 and 2 for most of the EU Member States, Iceland and Norway, mostly down to the 2-digit (division) level of NACE. The main variable analysed in this article is the number of persons employed. The type of statistical unit used for regional SBS data is normally the local unit, which is an enterprise or part of an enterprise situated in a geographically identified place. Local units are classified into sectors (by NACE) normally according to their own main activity, but in some EU Member States the activity code is assigned on the basis of the principal activity of the enterprise to which the local unit belongs. The main SBS data series are presented at national level only, and for this national data the statistical unit is the enterprise. It is possible for the principal activity of a local unit to differ from that of the enterprise to which it belongs. Hence, national SBS data from the main series are not necessarily directly comparable with national aggregates compiled from regional SBS.

Context

European enterprise policy is conducted by the Directorate-General (DG) for Internal Market, Industry, Entrepreneurship and SMEs (GROW). The European Commission's enterprise policies aim to create a favourable environment for business to thrive within the EU, creating higher productivity, economic growth, jobs and wealth. Policies are aimed at reducing administrative burden, stimulating innovation, encouraging sustainable production, and ensuring the smooth functioning of the EU's internal market.