Will France’s Protests Disrupt Growth?

October’s flash purchasing managers’ indexes (PMIs, business surveys measuring the breadth of growth) landed Friday, Q4’s first batch. They didn’t deviate meaningfully from longer-running trends, including the broad eurozone, which posted an expansionary reading. However, France was a sore spot. That probably doesn’t surprise many, given vast coverage of protests, perceived debt drama and political posturing ahead of next year’s election. Negative sentiment is hitting France hard now. But we think it is exaggerated. Recent history can help investors put France’s current situation in perspective—and illustrate why we don’t think today’s worries foretell a crisis.

S&P Global’s October flash estimates for nearly every major developed economy showed growth. America’s composite PMI (57.6) led the way, followed by the UK (53.1) and Japan (52.3).^[i] The broad eurozone grew (51.9), as did its largest economy and the prior Sick Man of Europe, Germany (52.8).^[ii] France, the current Sick Man of Europe, was the lone contractor (48.4).^[iii] Both services (48.4) and manufacturing (49.3) missed expectations and weakened from September’s growth. Beneath 50, it means more businesses reported contraction than expansion.^[iv]

French businesses reported heightened uncertainty and economic pressures, with the most pessimistic expectations in six-and-a-half years.^[v] S&P Global’s Senior Principal Economist blamed, “… a highly uncertain 2027 Presidential Election, compounding preexisting worries about France’s fiscal situation.”^[vi] Some speculated whether October’s results preview future weakness, especially as the country’s borrowing costs rise and protests dominate headlines. They sweat France’s domestic issues spilling over and risking contagion to the broader eurozone.

But we have seen this French political instability movie before. Remember when President Emmanuel Macron called a snap election in June 2024? That contentious race resulted in a hung Parliament. Since then, the inability to pass a budget doomed multiple French prime ministers. Prime Minister Michel Barnier failed to win support for his plan. He lost a no-confidence vote and resigned in late 2024. His successor, François Bayrou, muddled through until September 2025 before suffering a similar fate. The current premier, Sébastien Lecornu, lasted 27 days before resigning over budget issues. After his reappointment, he passed a 2026 spending plan—but is again under pressure to pass one for 2027.

Despite the political instability, France’s composite PMI didn’t materially deviate from its longer-running weaker trend. (Exhibit 1)

Exhibit 1: France Composite PMI, October 2023 – October 2026

Source: FactSet, as of 10/23/2026. Readings under 50 indicate contraction.

Some argue recent student protests make this episode different. But these, too, are not unprecedented. See the “Yellow Vests” protests, which began in November 2018. The protests did appear to affect December’s PMIs, as services fell to 49.0 from November’s 55.1.^[vii] That was the first output fall in 30 months and first new business decline since February 2016.^[viii] As IHS Markit—forerunner to S&P Global—reported at the time, “The unexpected downturn due to the social unrest represents significant downside risk to Q4 growth prospects. The French economy had been set to post respectable growth, following strong service sector performance in October and November.”^[ix]

Yet France’s services PMI returned to expansion in early 2019—and remained there for the rest of the year. Moreover, French GDP grew 0.7% q/q in Q4 2018 before speeding up to 0.9% the following quarter.^[x] According to French statistics agency Insee, the Yellow Vest protests may have reduced Q4 2018’s GDP growth rate by -0.1 percentage point, though that figure “… remains subject to much uncertainty.”^[xi] Insee noted the lack of a counterfactual as well as the possibility activity was postponed rather than lost.^[xii]

These recent history lessons are instructive for investors. Political instability and protests dominate headlines and can weigh on sentiment. But they don’t necessarily hit output. Compare the Yellow Vest and today’s student protests. The former forced businesses to put workers on reduced work hours.^[xiii] Protestors disrupted activity directly tied to production (e.g., road infrastructure and factory plants).^[xiv] Today’s protests appear to be causing more property damage than lost output (though future reports may discover otherwise). Property damage is obviously bad, but it makes the effect more comparable to natural disasters, which don’t typically cause recessions.   

Sentiment can weigh on economic data, especially in the short term. But heightened fear and/or uncertainty don’t automatically derail economic growth. This is especially true for PMIs. PMIs are timely snapshots of recent economic activity. But they capture only the breadth of growth, not its magnitude. Companies may say political instability or protests will delay investment decisions. Fair enough. But business investment grew from Q4 2018 – Q4 2019, when the Yellow Vest protests dominated headlines.^[xv] Similarly, amid 2025’s revolving door of prime ministers and budget uncertainty, business investment grew from Q1 – Q3 before dipping in Q4.^[xvi] For all the concerns some businesses have, it doesn’t mean all share the same mentality and act on it.

We don’t dismiss what is happening in France now, although the demonstrations’ scope is easy to exaggerate. The political and sociological discussions are important to have. But for investors, fear is high in Europe’s second-largest economy. We recommend staying cool amid today’s turbulence. Fear of a fiscal or economic crisis doesn’t mean one will actually occur. Now is time for calm.