Business failures rise in France

The Bank of France reported on October 9 that business failures in France reached 70,766 as of the end of August 2026, up from 70,692 in July. This represents a 4.8 percent increase over one year, with the number of failures surpassing the 2010-2019 average by 19.3 percent.

Economic challenges and new business growth

The central bank attributes the rise in failures to a deteriorating economic climate and repeated shocks affecting certain businesses. At the same time, new business creation is growing, with 116,917 businesses registered in August, a 6.5 percent increase from July after adjustments for seasonal variations.

Micro-entrepreneurs drive business growth

According to the National Institute of Statistics and Economic Studies (Insee), the growth in new businesses is largely driven by micro-entrepreneurs. Their registrations rose by 14.4 percent over twelve months, compared to a 6.7 percent increase for regular companies and 4.4 percent for traditional sole proprietorships.

Sector-specific trends in business creation

Business creation rates varied significantly across sectors. The information and communication sector saw the highest increase, with a 38 percent rise over twelve months. In contrast, finance and insurance saw a 9.9 percent decline, and transport a 1.5 percent drop, though trade showed a 10.9 percent monthly increase.

Registration does not guarantee business activity

Insee notes that while it tracks legal units registered in the Sirene directory, a registration does not guarantee economic activity. A January 2026 study found that nearly seven out of ten businesses become economically active within two years, but a September 2025 study showed that only 28 percent of micro-entrepreneurs registered in 2018 remained active five years later.

Failures concentrated in certain sectors

On the exit side, the Bank of France observed stability in most sectors, but failures were concentrated in some areas. In transport and warehousing, failures over twelve months exceeded the 2010-2019 average by 69.5 percent, while the increase was 53.8 percent in financial and insurance activities.

Business size influences failure rates

The size of businesses also plays a role in failure rates. Micro-businesses and units of indeterminate size accounted for 65,107 of the 70,766 failures, exceeding the average by 16.1 percent. Medium-sized businesses had a 73.4 percent gap from the reference period, and large businesses showed an even higher relative increase.

European context shows mixed trends

At the European level, Eurostat reported a 0.5 percent decrease in business registrations in the second quarter of 2026 compared to the first quarter, with a 3.6 percent drop in industry. However, bankruptcy declarations increased by 5.7 percent, with the strongest growth in education and social activities at 21.1 percent.