Eurozone pulls level with the US

Both the Eurozone and the US grew 0.4% q/q in Q2 2026. For Europe, that is a welcome upside surprise: growth landed in line with expectations (France, Germany) or above them (Eurozone overall, Spain, Italy), even as the Middle East conflict delivered an energy-driven inflation shock. It confirms that European growth rests on foundations solid enough to absorb this kind of shock. Country-level detail was incomplete on the day, but manufacturing business sentiment held firm across the board in H1, underwritten by a set of drivers (AI, defence, electrification, aerospace). US growth, by contrast, undershot expectations. But it remained robust, powered by AI investment and accelerating household consumption. Both, however, drew in imports fast enough to weaken the headline growth figure.

France: growth led by aerospace, electrification and healthcare

The rebound we had flagged duly occurred in Q2, at 0.2% q/q, as anticipated by our nowcast of July 23. The main driver was aerospace exports, which surged 20% q/q (0.9pp contribution) and erased their Q1 fall. Capital-goods exports (3.5% q/q) climbed to a record high, propelled in particular by electrification, with final-demand tied to AI, defence, EVs and energy. Household consumption told a similar story, as its rebound (0.2% q/q after -0.3% in Q1) was driven by autos, and by EVs and hybrids in particular. Public consumption, meanwhile, remained a constant contributor – 0.4% q/q in Q2, and a 0.3% quarterly average since early 2023 – driven above all by healthcare, where an ageing population acts as a structural tailwind. We expect GDP growth to extend into H2, with business investment turning into a driver again. It stabilized in Q2 (0.1% q/q) after two quarters of decline, and INSEE’s industry survey showed a clear rebound in the balance of opinion on investment intentions (18; 9pp above the July norm of the past two years).

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