The services sector will be a significant driver of economic growth
A low interest rate environment attracts more business investment and provides a boost to the services sector, which currently acts as the main thrust behind Europe’s economic growth. The services sector currently accounts for 66% of the total GDP in the EU according to the World Bank, and countries with more dominant services sectors are forecast to see the strongest economic growth over the next five years, including Luxembourg (79% of total GDP), UK (71%), Netherlands (70%) and France (70%) (see Chart 4).
Positive services sector growth will create office-based employment growth and new demand for office space. Oxford Economics forecast that 3.1 million additional office-based jobs will be created over the next five years across Europe, representing 4.9% growth during this period. London (+182,000 office-based jobs), Madrid (125,000) and Paris (90,000) will see among the largest increases over the next five years.
Assuming a ratio of 10 sq m of office space for each employee, this indicates a need for an additional 31 million sq m of space. Professional, science and tech will contribute 1.1 million additional jobs, representing 7.4% growth in this sector, more than any other sector.
Read the articles within Spotlight: The impact of a low rate environment below.