French Industry Faces Continued Decline Amid Economic Uncertainty
France's industrial sector declines amid factory closures and employment challenges, while economic growth remains slow due to political uncertainty.
- • Factory numbers decreased through late 2024 and early 2025 with a net loss of 25 factories in first half of 2025.
- • Industrial employment shows minimal growth, with projections of slight decline from Insee.
- • Economic growth forecast at 0.7% GDP for 2025 amid low economic morale and political uncertainty.
- • Banque de France governor calls France 'lagging behind' in Europe and urges deficit reduction without austerity.
Key details
Despite governmental ambitions to reindustrialize, the French industrial sector continues to struggle through 2024 and 2025. The number of factories in France decreased in the latter half of 2024 and persisted in declining during the first half of 2025, with a net loss of 25 factories between January and June 2025, according to Trendeo research (ID 94449). Industrial employment, which had been stable for over four years, now shows only marginal positive growth, with projections from Insee indicating a slight annual decline.
David Cousquer, founder of Trendeo, emphasized that while the broader economy is recovering, the industrial sector is lagging behind. This slowdown comes amid a broader economic mood dampened by political uncertainty, which François Villeroy de Galhau, governor of the Banque de France, linked directly to reduced confidence and subdued growth (ID 94634). The Banque de France projects a modest GDP growth of 0.7% for 2025, but Villeroy de Galhau noted that France is "the lagging wagon" in Europe, trailing behind other countries and regions.
Villeroy de Galhau stressed the importance of ending political instability to restore confidence, urging a reduction of the public deficit through stabilizing expenditures after inflation rather than strict austerity. His cautious outlook underscores challenges for the industrial sector within a complex economic environment where political factors weigh heavily on economic performance.
In summary, despite reindustrialization efforts, the French industrial sector is facing factory closures, stagnating or declining employment, and economic growth hindered by political uncertainties, requiring balanced fiscal measures to foster recovery.