French economic contraction drags eurozone business growth to four month low

France returned to economic contraction in October after only one month of growth, Euronews reported. The downturn in France pulled eurozone business activity growth down to a four month low. Political uncertainty and high energy costs contributed to the decline in French private sector performance. [1]

The composite purchasing managers index for the eurozone fell to 51.9 in October from 53.1 in September, according to Euronews. The figure was lower than economists had expected. The index remains above 50, which is the threshold that separates growth from contraction. Confidence among French companies also dropped to its lowest level since the first Covid-19 lockdowns in 2020. [1]

The economic slowdown coincides with widespread social unrest in France. The Guardian reported that recent protests and riots led to a town hall being set on fire, more than 2,000 shops being looted, 2,300 arrests, and 1,000 police officers injured. France is Europe's third most populous nation, with a population that reached 68.6 million people in January 2025. [2][11]

As FTMQ News reported earlier, real wages in France, Italy, Spain, and the UK were already projected to fall between early 2026 and early 2027. Rising energy costs have also been affected by war on Iran, which the International Energy Agency called the largest supply disruption in global oil market history. [13][14]