Commission Publishes 2026 Annual Report on the Single Market and Competitiveness

On 30 January, the European Commission adopted the 2026 Annual Single Market and Competitiveness Report, the sixth edition in its annual series assessing how the Single Market is functioning and whether conditions enable businesses to innovate, grow, and compete while delivering sustainable prosperity for European citizens.

The report is based on 29 key performance indicators covering a wide range of areas, including market integration and remaining barriers, energy prices, investment trends, skills, innovation, and sustainability. Together, these indicators help identify strengths, weaknesses, and priority areas for policy action at EU and national level.

Overall, the assessment shows a mixed picture. Compared with the previous edition, six indicators have improved, six have deteriorated, 15 remain broadly stable, and two indicators are newly introduced. These include improved recognition of skills and professional qualifications allowing EU citizens to work across Member States; stronger EU market surveillance reflected in increased product investigations; a higher proportion of EU companies adopting artificial intelligence, cloud services, and data analytics; increased InvestEU funding supporting the industrial transition; a growing share of renewable energy in overall energy consumption; and expanded annual capacity for renewable electricity generation.

At the same time, a number of indicators have deteriorated. These include a reduced share of intra-EU trade in EU GDP; a higher proportion of transposed Single Market Directives subject to infringement procedures; longer timelines for developing standards; worsening labour shortages in green-transition-related occupations; declining educational performance among 15-year-olds as measured by PISA; and lower levels of private investment relative to GDP.

Several indicators have remained broadly stable, including labour productivity (GDP per hour worked), perceived ease of regulatory compliance based on business surveys, public and private R&D expenditure as a share of GDP, patent application activity, venture capital investment relative to GDP, and domestic clean technology manufacturing capacity. 

The report also identifies priority areas where the Commission will concentrate its efforts in 2026 to reduce barriers within the Single Market. In particular, these actions will target late payment practices and obstacles affecting key services linked to the green transition. The Commission intends to address these and other challenges through structured dialogue with Member States and, where required, by launching infringement procedures. To better demonstrate the benefits of these enforcement actions for citizens and businesses, the Commission will publish transparent explanations outlining the goals pursued and the outcomes achieved.

2026 Annual Single Market and Competitiveness Report