Despite recent fluctuations, French industry is trending higher than earlier in the year, up 1.1% compared to the average of the first five months. This offers a modestly positive signal amid a subdued global backdrop. Still, the outlook remains mixed. While GDP is likely to have expanded in the third quarter of 2025, risks are mounting for the year-end.
Domestic demand remains anaemic. Household spending on goods was basically flat in August, edging up just 0.1% after a sharper-than-expected 0.6% decline in July. This lethargy persists despite low inflation (1.2% in September) and relatively strong purchasing power gains compared to other European economies. Political uncertainty, fears of tax hikes, and concerns over unemployment are eroding consumer confidence, prompting households to save more. The savings rate hit a record 18.9% in 2Q, and we expect it to remain elevated, further dampening consumption and undermining hopes for a near-term rebound.