France’s Economic Outlook November 2025: Services Drive Recovery Amidst Manufacturing Struggles
France’s Economic Outlook November 2025: Services Sector Fuels Recovery, Manufacturing Lags
France’s business climate is showing new signs of improvement in November 2025, thanks to renewed momentum in the services sector. However, manufacturing continues to face headwinds, highlighting a two-speed economic recovery.
Business Confidence Rebounds
The INSEE business climate index rose by 1 point to 98, nearing its long-term average.
This rebound comes despite continued political tensions and an unresolved budget debate in Parliament.
Private sector activity is stabilizing after a challenging period earlier this year.
Key Indicators
INSEE’s overall business sentiment index up to 98
Sharpest improvement in private sector outlook since August
Confidence bolstered particularly by service sector optimism
Services Sector Leads Economic Growth
The services industry is at the heart of the current upturn:
The Services PMI (Purchasing Managers Index) climbed to 50.8 (up from 48.0), signaling expansion for the first time in over a year.
INSEE’s business climate index for services jumped by 3 points, reflecting growing demand and improved outlook from business leaders.
The composite PMI, blending services and manufacturing, reached 49.9, a high not seen since August.
Why Services Are Surging
Increased demand for business and consumer services.
Recovery in tourism and leisure.
Greater resilience to global supply chain disruptions compared to manufacturing.
Manufacturing Remains Under Pressure
Despite the positive momentum in services, manufacturing continues to contract:
The Manufacturing PMI fell to 47.8, hitting a nine-month low.
INSEE’s climate indicator for industry dropped three points to 98.
Concerns in Manufacturing
Rising uncertainty about future production and order books.
Shrinking factory employment—the first drop since July.
Businesses highlight fragile export demand, but there are glimmers of hope as export orders rose for the first time since February 2022.
Industry Challenges
Ongoing geopolitical and economic uncertainty.
Cautious customer demand, especially in key export sectors.
Pressure on margins and hiring, with manufacturers remaining conservative.
The Outlook: Fragile but Hopeful
In summary, France’s economy is entering a period of stabilization, led by strong performance in services. However, any sustained recovery will require a rebound in manufacturing and greater political stability.
What to Watch
Resolution of France’s ongoing budget debates.
Macroeconomic trends affecting major trade partners.
Policymaker support for both manufacturing and new service economy sectors.
Key Takeaways
Services are powering the rebound in business confidence for November 2025.
Manufacturing faces ongoing contraction but could benefit from rising export orders.
Political and budget uncertainty continue to weigh on the overall outlook.
Stay tuned for more updates on France’s economic trends and what they mean for expats and business leaders across the country.
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