The rigidity of the labor market under the 35-hour workweek and weak corporate investment have been cited as factors behind France's prolonged slowdown in growth, while the government's labor reforms are also said to be facing difficulties.
The French economy has been unable to break out of its prolonged growth slowdown, with labor-market rigidity and weak investment cited as contributing factors. Efforts concerning the merits of the 35-hour workweek and extending working hours continue to face conflicting opinions, making it difficult to revise the system.
According to OECD data, average annual working hours per person in France last year were 1,498, or 302 hours fewer than in the United States and 335 hours fewer than in South Korea. France has five weeks of paid leave and the RTT system, which makes it easier to take additional time off, and total vacation time is said to reach approximately two months in some cases.
In industry, weak corporate investment has affected manufacturing output and employment. The number of factories that ceased operations domestically last year rose to 160, while only 103 new factories were established. The domestic production ratio of the automobile industry, including Renault, is said to have declined, while manufacturing's share of GDP reportedly fell from 15% in 2000 to approximately 9% in 2022.
The attraction of foreign investment has also slowed. According to EY data, the number of investment projects last year was 852, a 32% decline from 1,259 in 2022. These factors are analyzed as contributing to the loss of vitality in the French economy.