French Industry: Significant Slowdown in First Half of 2025 with More Factory Closures than Openings

Net balance of openings hits three-year low

The first half of 2025 marks a turning point for the French industry cycle. The net balance shows only +9 new or expanded sites, compared to +48 in the previous semester. This contraction reflects the slowdown of a reindustrialization movement that began in 2022 but has been weakened since 2024 by an increase in the number of closures. The national barometer, which systematically tracks openings and closures, also indicates a continued decrease in newly authorized industrial projects, a direct result of a more constrained investment environment and intensified international competition. This slowdown occurs despite the public authorities' stated intention to maintain a favorable dynamic for industry within the country.

Green industry and defense on the rise, chemistry and transportation facing challenges

However, some sectors are emerging as counterpoints to this overall trend. The green industry alone is generating 11 net openings, driven by sites dedicated to recycling and refurbishing. The circular economy is now establishing itself as a central focus. For the first time, the defense sector is also gaining momentum with a net increase of 8, a change fueled by the geopolitical context and strong demand for military aerospace production, which accounts for 40% of new establishments in this area. In contrast, the chemical industry and transportation are facing serious structural challenges: the chemical sector saw six closures resulting in a net loss of 4, and the automotive sector saw 13 closures, mainly among equipment manufacturers, again not offset by new sites. The agri-food sector, traditionally an industrial mainstay, is also experiencing a significant slowdown despite 19 new sites being recorded.

Ongoing Challenges and Outlook for the Second Half of 2025

The review of the first six months is accompanied by concerns about the sustainability of the French industrial fabric, with business failures stabilizing at a high level. Energy challenges, a decline in project approvals, and pressure on margins remain major obstacles. Several factory consolidations or sector reorganizations are anticipated as the regulatory environment and demand evolution necessitate rapid transformation. The question of the production model, attractiveness for reshoring, and export support is thus at the heart of industrial strategies for the remainder of 2025, with increased trade-offs expected around future sectors such as defense and environmental transition.