French firms absorb Middle East conflict shock, but uncertainty rises

The Bank of France's monthly business survey shows French companies have largely absorbed the initial shock from the Middle East conflict, but rising uncertainty and higher energy costs are beginning to weigh on the economy. Activity grew in April but at a slower pace, driven by industrial output and defence-related sectors (aeronautics, electrical equipment, electronics), while construction slowed and services stalled. Firms report higher raw material and transport costs after a jump in oil prices, intensifying supply-chain pressure for energy‑intensive industries. Because uncertainty is unusually high, the central bank withheld its usual quarterly growth estimate — a cautionary signal for markets and investors.