Overview
The Bank of France on 9 July 2026 revised its second‑quarter 2026 GDP growth forecast upward to 0.2% annualised, up from the previous estimate of 0.0% and following a 0.1% contraction recorded in Q1.
Drivers of the Revision
The upward revision is attributed to a rebound in economic activity in June across industry, services and construction. The monthly business‑sentiment survey covering 8,500 firms indicated strengthened activity in industry and a rebound in services and construction. Services were the main contributor, with stronger consumer services, information and communication, hospitality and transport. Manufacturing also provided support, although construction is expected to decline over the quarter.
Sector‑Specific Observations
A record heatwave in late June prompted many firms to adjust working hours to avoid the hottest periods, which slowed some construction projects and required changes to factory schedules. Despite these disruptions, companies avoided major interruptions. The heatwave boosted demand in the hospitality sector, with hotels experiencing higher occupancy as customers sought air‑conditioned rooms, and orders for cooling systems increased.
Business Sentiment and Uncertainty
The uncertainty indicator fell back to its level before the Iran war began on 28 February, while manufacturing orders remained around normal levels. Companies cited international tensions and input‑cost pressures as concerns, although supply‑chain difficulties and pressure from raw‑material and energy prices have eased compared with earlier peaks this year.
Outlook
Business leaders expect activity to continue growing in July versus June, at a more moderate pace in industry and services and only slightly in construction.