In the first quarter of 2010, in both the euro area (EA16) and the EU27, the seasonally adjusted business investment rate fell compared with the previous quarter, while the profit share grew. In the euro area, stocks decreased for the fifth quarter in a row.

These data come from a detailed set of quarterly European sector accounts released by Eurostat, the statistical office of the European Union, and the European Central Bank (ECB).

Business investment rate still falling in both zones

In the first quarter of 2010, the seasonally adjusted2 gross investment rate3 of non-financial corporations was 19.7% in the EU274, compared with 20.1% in the fourth quarter of 2009. In the euro area5, the investment rate was 20.2% in the first quarter of 2010, compared with 20.4% in the previous quarter.

Investment rate of non-financial corporations (seasonally adjusted)

In the euro area, the gross investment rate of non-financial corporations decreased due to gross fixed capital formation (investment) falling faster (-1.1%) than value added (-0.1%). Stocks of materials, supplies and finished goods dropped for the fifth quarter in a row.

Business profit share continues to recover in both zones

In the EU27, the gross profit share6 of non-financial corporations was 37.0% in the first quarter of 2010, compared with 36.9% in the fourth quarter of 2009. In the euro area, the profit share was 38.0% in the first quarter of 2010, compared with 37.7% in the previous quarter.

Profit share of non-financial corporations (seasonally adjusted)

In the euro area, the increase in gross profit share of non-financial corporations was due to compensation of employees (wage costs) plus taxes less subsidies on production falling faster (-0.5%) than value added (-0.1%).