French industry: Q1 2026 under pressure, between slowdown and geopolitical tensions

After a mixed end to 2025, the French industrial sector is entering 2026 with caution. The first quarter confirms a fragile dynamic, in an environment that is both uncertain and constrained, where signs of stabilization remain limited.

Industrial activity still subdued, but early signs of easing

At the start of the year, the manufacturing PMI remains overall below the 50 threshold, indicating a slight contraction in activity. This level reflects still-hesitant demand, relatively thin order books, and decision-making cycles that continue to lengthen—particularly for industrial investments.

However, data from February and March suggest a gradual inflection. Without signaling a recovery, a plateau appears to be emerging, indicating that the low point may be approaching.

From a macroeconomic perspective, initial estimates point to modest growth, ranging between +0.1% and +0.2% over the quarter. While limited, this remains consistent with a broader environment marked by caution and wait-and-see attitudes.

Significant sectoral disparities

Not all industrial segments are affected in the same way. Some sectors are better able to absorb ongoing turbulence:

• Energy, driven by structural challenges and long-term investments
• Aerospace, benefiting from a gradual recovery in production rates
• Industrial equipment, supported by modernization needs and infrastructure maintenance

These activities, being less dependent on short-term cycles, currently demonstrate greater resilience.

A geopolitical shock reshaping the landscape

The defining feature of early 2026 is undoubtedly the escalation of geopolitical tensions in the Middle East, involving the United States, Israel, and Iran.

At the center of concerns lies the Strait of Hormuz, through which nearly 20% of global oil supply transits.

Since late February, the situation has deteriorated sharply:

• Attacks on vessels
• Suspension of operations by several major shipping companies
• A significant drop in maritime traffic, in some cases nearing a complete halt

An energy shock with global repercussions

The impact on markets has been immediate:

• Oil prices temporarily exceeding $120 per barrel
• A major disruption to global supply, estimated at several million barrels per day
• Renewed inflationary pressures and increased volatility

This energy shock is occurring within an already fragile context, amplifying economic uncertainty on a global scale.

Direct impacts on European industry

For European—and particularly French—industry, the consequences are both tangible and immediate:

• Rising energy costs
• Increasing logistics costs
• Potential tensions on certain raw materials
• Greater instability across supply chains

These factors place additional strain on structures already weakened by several years of successive crises.

2026: a turning point?

This first quarter marks a shift. Beyond the economic slowdown, geopolitical and energy risks are now emerging as key determinants of industrial activity.

In this unstable environment, priorities are evolving.

The ability to secure operations, ensure supply reliability, and optimize existing assets is becoming critical. More than ever, extending the lifespan of equipment and reducing dependence on long procurement cycles are proving to be strategic levers.