France industrial output posts surprise fall

Industrial production in France declined by 0.5% month-over-month in May 2025, marking the second consecutive monthly contraction and coming in below market expectations of a 0.3% increase.

Despite the miss, the figure represented a moderation from April’s sharper 1.4% drop, offering a small measure of relief that the pace of decline may be stabilizing. However, the broader picture still points to continued fragility in France’s industrial sector, particularly in the face of external demand challenges and persistent cost pressures.

The downturn was again driven by weakness in manufacturing output, which fell 1% in May, following a 0.7% drop in April. Several key sub-sectors posted notable declines, underscoring the breadth of the slowdown. Production of coke and refined petroleum products dropped 6.1%, extending the sharp 14.3% fall from the previous month, amid high energy input costs and weaker international demand. The food and beverage sector also declined by 0.6% after a modest gain in April, reflecting softer domestic consumption trends.

Further contraction was observed in machinery and equipment manufacturing, which fell 0.8%, and the "other manufacturing" category, which includes textiles, chemicals, and miscellaneous goods, dropped by 1.4%. These declines reflect the ongoing challenges faced by French exporters, particularly amid sluggish global trade, shifting supply chains, and uncertainties stemming from recent tariff threats in global markets.

On a more positive note, output rebounded in the energy and utilities segment, with production rising 2% in May, following a steep 5% decline in April. This category includes mining and quarrying, electricity generation, water supply, and waste management, and its rebound was attributed to more favorable weather conditions and normalized utility demand after prior disruptions.

On a year-over-year basis, total industrial production was down 0.8%, signaling that the sector continues to underperform relative to 2024. This subdued performance contrasts with some of France’s Eurozone peers, where activity has begun to stabilize or even expand modestly in recent months.

The latest figures raise fresh concerns about the underlying health of France’s industrial base, which has struggled to regain momentum amid persistent inflationary pressures, weakened competitiveness, and policy uncertainty. While broader Eurozone sentiment has shown signs of improvement, France’s industrial sector appears to be lagging behind, weighed down by both structural inefficiencies and cyclical headwinds.

Looking ahead, analysts will closely watch upcoming indicators—such as business sentiment surveys, new orders, and export data—for clues on whether the recent weakness will persist or if stabilization is within reach. Policymakers may also face increasing pressure to introduce targeted support measures aimed at reviving industrial investment and improving competitiveness in key manufacturing sectors.