The European Commission has released the 2025 Annual Single Market and Competitiveness Report, providing an in-depth assessment of the EU’s economic performance and identifying both challenges and opportunities for enhancing competitiveness. The report highlights persistent barriers within the single market, noting that regulatory burdens remain a significant concern for two-thirds of companies. Although Europe continues to benefit from a robust industrial base, investment in research and development remains insufficient, digitalisation lags behind, and high energy prices weigh heavily on industrial performance. The report stresses the need to accelerate the decarbonisation and circular transformation of industry to maintain global competitiveness. It also warns of increasing external pressures, including strategic dependencies and overcapacities in third countries. Serving as an analytical foundation for upcoming EU initiatives such as the Clean Industrial Deal and the Single Market Strategy, the findings aim to guide evidence-based policymaking. Complementary documents, including the Single Market Scoreboard and new insights from the European Monitor of Industrial Ecosystems, were published alongside the report. The Commission underscores the urgency of unlocking the full potential of the single market to secure sustainable growth and industrial resilience across Europe.