France’s Industrial Decline: Why Factory Closures Are Surging

France faces a wave of factory closures in 2025, exposing deep structural weaknesses in the country’s industrial sector despite record foreign investments.

While France has worked hard to rebuild its industrial backbone, 2025 has exposed a harsh truth — the country is losing factories faster than it’s gaining them. A total of 63 more factories closed than opened, marking the worst industrial contraction since 2013, according to the research firm Trendeo.

This downturn threatens President Emmanuel Macron’s ambition to lift the manufacturing share of GDP from 10% to 15% by 2035. Instead, the numbers suggest that the dream of full reindustrialisation may be slipping further away.

A Record Year for Factory Closures

Data from both Trendeo and the Direction Générale des Entreprises (DGE) reveals that France saw 82 factory closures in the first half of 2025, against just 44 openings. The net loss pushed the country’s industrial map into negative territory for the first time in over a decade.

What’s Driving the Decline?

Several long-standing weaknesses are eroding France’s industrial base:

Soaring energy costs: Energy prices remain three to four times higher than in the U.S. or China, squeezing profit margins.
Heavy regulation: European environmental and labour regulations add compliance complexity and cost.
High labour costs: The average industrial labour cost in France sits around €46 per hour, far above global competitors.
Weak productivity growth: Despite automation efforts, productivity gains have not offset these high costs.

Structural Crisis Hits Key Sectors

Two very different realities now coexist in French industry. On the bright side, aerospace, renewable energy, and waste management continue to expand. Yet the country’s automotive, metallurgy, textile, and food processing sectors are losing ground.

The automotive industry alone has seen over 40 restructuring plans in 2025.
The agri-food sector has lost 13 production sites just this year.
Union data from the CGT shows more than 107,000 jobs directly threatened, with ripple effects putting up to 300,000 jobs at risk across supply chains.

The Fall of Industrial Icons

Perhaps the most symbolic casualty is Brandt, once a household name in French appliances. The company’s liquidation in December 2025 led to 700 job losses and ended production of brands like Vedette, Sauter, and De Dietrich — a heavy emotional blow for the French industrial landscape.

Similarly, ArcelorMittal closed its factories in Reims and Denain, slashing 135 jobs, and warned that “all European steel sites are at risk.” These closures echo a broader European trend of deindustrialisation as global competition and green transition costs mount.

The French Paradox: Investment Without Factories

Here’s the paradox: while industrial jobs vanish, foreign investment is booming. France attracted €67 billion in data centre investments out of a record €125 billion in announced projects in 2025.

So why isn’t that saving French industry? Experts like David Cousquer of Trendeo point to an imbalance:

“France is attracting capital — but not factories. We need a stronger manufacturing momentum.”

In other words, the country is becoming a hub for digital infrastructure and logistics — not physical production.

Can France Reverse the Trend?

France’s future industrial strength may depend on three key strategies:

Lowering energy costs through renewable expansion — boosting solar, wind, and nuclear power.
Focusing on advanced manufacturing — precision engineering, robotics, and battery production.
Simplifying regulations to make France more business-friendly without undermining worker protections.

With global supply chains shifting and the EU seeking “strategic autonomy,” France still has the potential to regain ground — but time is running out.

Bottom Line

France’s wave of factory closures in 2025 is more than an economic blip; it’s a warning sign. Without decisive action on cost competitiveness and industrial innovation, the country could cement its role as an investor’s destination — but no longer a builder’s one.