After a robust 2025, Europe’s tech industries’ uneven return to growth is under threat of geopolitics

The picture also varies widely across sectors. Electrical engineering and ICT are clearly leading the way, supported by strong demand linked to AI and electrification. Mechanical engineering is also set to pick up, with advanced manufacturing technologies gaining traction. By contrast, metal technology is recovering more slowly, weighed down by the ongoing weakness of the automotive sector, although defence-related demand is providing some support.

Trade patterns are also shifting. Exports to the United States declined in 2025 due to tariffs, while intra-European trade continues to grow, reflecting a move toward regionalisation.

On the labour side, the situation is stabilising but not improving just yet. Employment is expected to decline slightly again this year, and longer-term challenges, especially an ageing workforce, are becoming harder to ignore. Attracting new talent and keeping experienced workers in the sector will be essential.