Source Credit : Portfolio Prints
Introduction
France recently announced a whopping €30.4 billion in planned investments into its industrial sector, backed by about 150 domestic projects spanning data centres, recycling facilities, green industries, and more.
On paper, this seems like a strong commitment to reindustrialisation — especially after the pandemic spotlighted how vulnerable global supply chains are. But despite the big numbers, many analysts, business leaders, and unions are warning that France’s industrial base is not out of the woods yet.
The Reality Behind the Investment Figures
Slowing Momentum in Factory Activity
- In the first half of 2025, 82 factory closures were recorded in France versus only 44 openings, according to the national industrial barometer.
- Although the government counts expansions too (86 expansions vs 39 reductions), the net gain is just +9 sites, sharply down from the +48 net in the previous half-year.
- This points to a significant slowdown in France’s reindustrialisation drive, which had gained momentum after COVID.
| Period |
Factory Openings |
Factory Closures |
Expansions / Reductions |
Net Gain / Loss |
| H1 2025 |
44 new openings |
82 closures |
Expansions: 86 ; Reductions: 39 |
+9 sites (when you count expansions/reductions) |
| Full Year 2024 |
114 openings |
119 closures |
Expansions: 152 ; Reductions: 58 |
+89 sites (net, including expansions) |
Volatile and Weak Industrial Output
- Industrial production growth is erratic: after a very strong monthly rebound in June 2025 ( +3.8%) it dropped 1.1% in July.
- On a yearly basis, as of March 2025, industrial output was 0.4% lower than March 2024.
- These fluctuations illustrate structural fragility — not a smooth recovery.
Uncertainty from Policy & Politics
- Political instability is cited as a major drag: frequent leadership changes, stalled legislation, and uncertainty in regulation have eroded investor confidence.
- Key industrial regulation is reportedly delayed, such as a multi-year energy programming law.
- According to the OECD, business confidence remains subdued, weighed down by “rising policy uncertainty.”
Struggling Traditional Industries
- The steel industry is seeing restructuring and potential closures.
- The automotive sector is suffering from sharp drops in demand, compounded by stiff competition from abroad (especially Asia).
- Major auto-equipment suppliers are reducing jobs: Valeo announced 868 job cuts; Forvia plans thousands of job losses across Europe.
Energy Costs & Debt Constraints
- High energy costs remain a drag for energy-intensive industries.
- The French government’s budget situation is tight, and the uncertainty around fiscal policy may discourage long-term industrial investments.
- Indeed, some firms are wary of tax hikes or policy shifts in future budgets.
Employment Risk
- With factory closures rising, trade unions warn of hundreds of thousands of jobs at risk in the long term.
- The industrial barometer and union data suggest this may not just be a short-term dip, but a more significant structural risk.
Why Is This Happening?
- Global Competition: French industrial firms are losing out to lower-cost competitors, especially in sectors like steel and automotive.
- Energy Price Pressure: High energy costs in Europe make industrial production more expensive compared to countries with lower energy input costs.
- Policy Risk: Unstable governments, unpredictable regulation, and delayed reforms are undermining investor confidence.
- Debt & Fiscal Limits: With high public debt, the French government may struggle to sustain big industrial subsidies or stimulus indefinitely.
- Structural Rigidity: Some legacy industries may be too slow to adapt to new green technologies or global demand shifts.
| Category |
Approximate Investment / Evidence |
| Data Centres |
~ €4 B known for the OpCore data centre + ~€1.5 B for Sesterce campus = ~5.5B+. But not all data-centre investments may be publicly broken out. |
| Recycling / Circular Economy |
~ €130 M explicitly from Derichebourg for recycling sites + other “environment” projects. |
| Energy / Green Industry |
Part of the 22 “energy & green” projects, but no total euro breakdown given. |
| Defense |
No clear euro allocation in public data. |
| Luxury / Cosmetics |
L’Oréal: ~€60 M; also “consumer goods” sector includes cosmetics, but total share unclear. |
What the Government Is Doing
- The Choose France summit is a key part of the strategy: it’s meant to rally domestic and foreign business leaders around France’s industrial agenda.
- The government is promoting a “European preference” policy to protect and encourage investment in strategic sectors.
- There is talk of extending deadlines for combustion-vehicle bans to help manufacturers make the transition.
- Authorities are also pushing local governments to prepare industrial brownfields (unused industrial land) so investors can quickly scale up.
- The industry minister has made statements warning against alarmism, but has also acknowledged that “industrial momentum is slowing.”
Conclusion
The headline number — €30.4 billion in planned investments — reflects ambition. But the deeper picture is more nuanced and worrying. Despite significant capital being pledged, France’s industrial sector is struggling with factory closures, volatile output, policy uncertainty, and structural headwinds.
The challenge now is not just to invest money — but to restore confidence, stabilize policy, and make sure that investments lead to tangible, long-term industrial revival, not just headline-grabbing announcements.
Without that, there’s a real risk that France’s reindustrialisation moment could fizzle out — leaving the ambition unfulfilled.
