Europe Blog: France - A weakening economy in May, but not THAT weak

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Europe Blog: France - A weakening economy in May, but not THAT weak

Deutsche Bank

Research

Economics Date

Europe Blog 21 May 2026

France - A weakening economy in May, but

Yacine Rouimi not THAT weak

Senior Economist

+44-20-754-71014

This morning's flash PMI for France points to a sharp economic slowdown, with

the composite output index falling deep into recessionary territory. While this Mark Wall

confirms the slowing trend we expected, we would interpret the magnitude of this Chief Economist

+44-20-754-52087 decline with caution. Our analysis suggests the weakness is amplified by a

statistical artifact, as May 2026 has an unusually high number of public holidays

and "bridging days" that standard seasonal adjustments may not fully correct. The

fact that the PMIs did not collapse similarly in Germany or the rest of the Eurozone

largely corroborates this view. The bottom line is that the French data for May –

not only the PMIs but also upcoming official releases – is likely to be artificially

depressed, overstating the true pace of the slowdown in an economy that is

otherwise less directly exposed to the current energy shock.

A clear signal from the PMIs, but… This morning's flash PMI release for France

points to a sharp deterioration in economic activity in May, with the composite

output index falling to 43.5 – a level that typically signals an economy in recession

(Figure 1), driven by a pronounced decline in the services component to 42.9 – to

levels last seen during the COVID pandemic.

Figure 1: The May French PMIs are pointing to meaningful downward pressure for activity, is that fair?

GMTGMT

Source: Deutsche Bank Research, INSEE, Bank of France, S&P Global 13:45:0113:45:01

While there is no question the economy is slowing – it has every reason to –, we