France Business Climate Stable in March

France’s overall business climate remained at 94 in May 2026, unchanged from April as expected, and still well below its long-term average of 100. Sentiment in the manufacturing sector notably improved, with the indicator rising to 102 from 100, moving above its long-term average on stronger assessments of past production and firmer order books. Building construction also edged up to 97 from 96, but remained slightly below average as modestly better expectations offset subdued activity. Wholesale trade improved marginally to 96 from 95, indicating slight stabilization. Meanwhile, services weakened further, slipping to 93 from 94, and staying well below normal. Retail trade saw the sharpest drop, falling to 89 from 94, driven by weaker demand and a deteriorating outlook. The employment climate deteriorated to 92 from 95, its lowest since the health crisis and well below its long-term average, reflecting weaker workforce expectations in services.

France’s overall business climate fell to 94 in April 2026, the lowest level since July 2024, from 97 in March, moving further below its long-term average of 100. The deterioration was driven by a sharp drop in retail trade and motor vehicle confidence, where the climate indicator plunged to 94 from 99, pressured by weaker ordering intentions and a softer business outlook. Services sentiment also worsened, with the sector gauge slipping to 94 from 96, marking its lowest level since April 2015 outside the pandemic period and remaining below its long-run norm for an eighteenth straight month. Meanwhile, the business climate in building construction was unchanged at 96, still below average, as weaker expectations for future activity offset a modest rebound in views on past activity. In contrast, manufacturing provided a small offset, with confidence edging up to 100 from 99, returning to its long-term average on firmer assessments of past production and order books.

France’s overall business climate held at 97 in March 2026, remaining below its long-term average of 100. Manufacturing confidence fell to 99 from 102 in February, returning below the long-term norm, as balances for past production and order books, both overall and foreign, weakened, especially in the “other transport equipment” segment. Services sentiment stayed subdued at 96, with corporate services showing particularly gloomy conditions. The business climate in building construction edged up slightly to 97 (vs 96), supported by stable past activity and marginally improved order books, but remained under its long-term average. Retail trade and motor vehicle repair rebounded modestly to 99 (vs 98), driven by stronger ordering intentions. Meanwhile, the employment climate rose to 94 from 93, still below average, mainly due to improved expectations for workforce size in services, including temporary work agencies.