France is on course to avoid a recession in the final quarter of the year, the Bank of France said on Monday, as business executives reported activity picking up and expected it to accelerate further in November.
The euro zone’s second-biggest economy is set to grow “moderately” in the fourth quarter after contracting by 0.1% in the previous three months, the central bank said in its monthly outlook. A technical recession is defined as two consecutive quarters of economic contraction, so a return to growth would take France clear of that danger.
The outlook is based on the bank’s monthly survey of 8,500 companies. Executives reported that activity picked up in October in both industry and services, while construction remained broadly flat.
Manufacturing was supported by strong demand in aerospace and in sectors linked to defence spending and data-centre construction, although carmakers and several other industrial branches continued to struggle. Companies surveyed said they expected industrial output to accelerate further in November, with activity rebounding in pharmaceuticals and autos and remaining buoyant in aerospace and technology-related industries.
Services activity was also forecast to grow, though at a slower pace, while construction was expected to remain broadly stagnant as weak demand continued to weigh on the sector.
The central bank stopped short of giving a specific growth forecast so early in the quarter, citing uncertainty over the economic impact of recent protests and unrest, as well as international developments following the US midterm elections.
France has seen a series of protests since September that began over underfunded schools but have since broadened, with unions organising demonstrations over the cost of living. The unrest adds pressure on the minority government as it struggles to push spending cuts through a deeply divided parliament.
The survey also pointed to a sharp rise in uncertainty, especially in construction and services. Firms cited political and budget uncertainty, social unrest and higher fuel prices as key concerns, saying customers were delaying projects and investment decisions and reducing visibility on business prospects in the months ahead.
Sources: Reuters — “France to dodge threat of year-end recession, central bank says” (https://www.reuters.com/business/france-dodge-threat-year-end-recession-central-bank-says-2026-11-09/)
