French Economy: Business Confidence Slowly Improves

A feeling of improvement. The business climate continues to recover in France, although it has not yet reached a truly favorable level. In August 2026, the composite indicator calculated by Insee gained one point to reach 98, up from 97 in July. It has improved for the third consecutive month but remains slightly below its long-term average, set at 100. This evolution reflects an improvement in the assessments made by business leaders regarding their activity and prospects. However, it does not constitute a direct measure of economic growth.

These results must nevertheless be interpreted with caution. The indicator synthesizes the opinions of business leaders and does not directly measure production, hiring, or GDP growth. The increase from 97 to 98 signals an improvement in economic sentiment, but it is not sufficient to demonstrate an actual recovery in activity. Let's now look at the figures.

• The business climate in France continued its recovery in August 2026, reaching an index of 98.

• The industry exceeded its long-term average with an index of 103, while the construction sector remains behind at 96.

The improvement concerns three of the four major sectors monitored by Insee. The most marked movement appears in retail trade and automotive repair: the indicator gained three points to reach 99. This progression is notably explained by a better appreciation of past sales and a recovery in order intentions.

In industry, the business climate advanced by two points to 103. It thus exceeds its long-term average, primarily driven by more favorable personal production prospects.

Services recorded a more modest improvement. Their indicator gained one point to reach 100, after three consecutive months of progress. The companies surveyed are notably more positive regarding their past activity, their expected activity, and the anticipated evolution of demand.

The construction sector remains the main weak point. Its indicator remains unchanged at 96, despite a rebound in entrepreneurs' opinions regarding their future activity. The sector thus remains significantly below its long-term average.

The composite employment climate indicator remained stable at 99 in August. This level, close to its historical average, suggests a relatively stable situation, but does not allow for a conclusion about a recovery in hiring.

This index indeed aggregates several responses regarding past and expected staffing levels in industry, services, retail trade, and construction. Its stability primarily means that the overall assessment of companies regarding employment has not changed compared to July.

The data from July have also been slightly revised after receiving late responses. The service climate and the employment climate were raised by one point, while construction was lowered by one point and retail trade by three points.

The survey was conducted between July 27 and August 18. It depicts a French economy that is less pessimistic than in spring: the general indicator rose from 94 in April and May to 98 in August. The recovery, however, remains incomplete, with the national climate still below its average and construction persistently lagging behind. The publication in September will allow us to verify whether this summer improvement transforms into a trend, but the economic situation appears complicated.

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