French Economy Faces Broad Challenges with Sectoral Struggles and Job Cuts

France’s economy in early 2026 is confronting significant hurdles across multiple key sectors, with business confidence waning amid inflation, declining demand, and structural shifts. In the Pays basque region, a third of business leaders report revenue drops, with only 19% optimistic about the economic future, down 10 points since mid-2025, illustrating widespread uncertainty.

The construction sector, a traditional economic barometer, is notably weakened. Industry veteran André Garreta has called for substantial tax reductions to attract private housing investment, advocating for measures similar to the former Pinel scheme alongside rent payment guarantees while maintaining rent caps to ensure affordability. Tourism also faces headwinds in this region, with a decline in family tourism as travelers favor destinations in the southern Landes.

Meanwhile, the notable appliance manufacturer Seb plans to cut 2,100 jobs globally as part of a restructuring effort, including 500 positions in France, reflecting cost-saving responses to difficult market conditions. The French government is similarly promoting "rupture conventionnelle," a negotiated job termination scheme, to implement economic savings amid this challenging environment.

On a positive note, the services sector shows some resilience, managing to maintain revenues, expand hiring, and invest, though often at the expense of lower profit margins.

Agricultural producers are also voicing concerns, specifically regarding misleading "made in France" labels on apples, spotlighting transparency and competition issues in the sector. Within French Tech, innovation continues, exemplified by Sumeria's partnership with Mistral AI, signaling ongoing strengths in technology despite general economic pressures.

Overall, these developments depict an economy grappling with inflation-driven demand drops, sector-specific difficulties, and strategic restructuring by major companies, alongside calls for policy adjustments to stimulate private investment and support vulnerable populations.