French manufacturing output falls 1.1 percent as refining drops 12 percent in June
French manufacturing output fell 1.1 percent in June 2026 after a 1.0 percent fall in May, the national statistics institute reported on 5 August. Total industrial output edged up 0.1 percent after a 0.1 percent decline, the difference between the two series explained almost entirely by energy.
| French output, June 2026 | Change on May | Previous month |
|---|---|---|
| Manufacturing | minus 1.1 percent | minus 1.0 percent |
| Total industry | plus 0.1 percent | minus 0.1 percent |
| Coking and refining | minus 12.0 percent | minus 11.7 percent |
| Transport equipment | minus 3.8 percent | minus 2.1 percent |
| Food industries | minus 0.8 percent | minus 0.3 percent |
| Other manufacturing | minus 0.6 percent | minus 0.4 percent |
| Machinery and equipment goods | minus 0.3 percent | minus 2.8 percent |
| Capital goods | minus 1.2 percent | — |
| Intermediate goods | minus 1.2 percent | — |
| Extractive industries, energy and water | plus 3.8 percent | plus 2.9 percent |
| Construction | minus 2.9 percent | plus 1.2 percent |
Refining fell 12.0 percent in June after 11.7 percent in May, which the institute attributes to a refinery maintenance shutdown and to production losses during the heat-wave episode. The same heat wave worked in the opposite direction elsewhere: extractive industries, energy and water rose 3.8 percent on elevated electricity consumption. Two consecutive double-digit monthly falls in refining, in the same summer that Gulf crude flows have been disrupted, is a combination worth noting. Refining carries a small direct weight in the overall industrial index, so a 12.0 percent fall in the branch is not a 12.0 percent shock to French industry, and that weighting is much of why total industry still edged up while manufacturing fell.
The weakness is not confined to those two branches either. Machinery and equipment goods fell only 0.3 percent, but the institute’s broader capital goods grouping was down 1.2 percent on the month, as were intermediate goods.
Across the second quarter as a whole, total industry was 1.9 percent above the same quarter of 2025 and manufacturing 1.1 percent above. Construction fell 2.9 percent on the month after a 1.2 percent rise, and was 2.9 percent lower than a year earlier.
Sovereign funding, by contrast, went smoothly. Agence France Trésor allotted 12,495 million euros across four long-dated lines on 6 August, for settlement on 10 August.
| Long-dated auction, 6 August 2026 | Amount, millions of euros | Weighted average yield | Bid-to-cover |
|---|---|---|---|
| 1.25 percent, May 2036 | 1,996 | 3.86 percent | 3.74 |
| 3.70 percent, November 2036 | 6,340 | 3.90 percent | 2.33 |
| 3.80 percent, June 2037 | 2,119 | 3.95 percent | 2.62 |
| 0.50 percent, June 2044 | 2,040 | 4.37 percent | 2.78 |
The spread between the ten-year area at 3.86 to 3.90 percent and the 2044 line at 4.37 percent is about 47 to 51 basis points on our calculation, and the allocation-weighted average yield across the four lines was about 3.98 percent, also our calculation. The heaviest demand relative to size came on the smallest line, the low-coupon 2036 bond, at 3.74 times cover.
Why it matters: France is running an industrial contraction and a comfortable funding position at the same time, and the two are not in tension yet. Our reading is that the manufacturing weakness is led by refining and transport equipment but is not confined to them, since capital goods and intermediate goods both fell 1.2 percent, while the quarterly year-on-year comparison remains positive. The refining collapse is the line with Gulf relevance, because a French refining system running two consecutive double-digit monthly declines imports less crude regardless of what happens to price.
Looking ahead: July industrial production is due in early September. Agence France Trésor scheduled a second non-competitive tranche on the same lines for 7 August, which may raise the total issued above the 12,495 million euros allotted.
Sources: INSEE, Informations Rapides number 191, industrial production in June 2026, 5 August 2026; Agence France Trésor, long-term government bond auction results, 6 August 2026.
