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What markets may be missing about Macron
7/17/2026
France’s politics may be febrile, but manufacturing costs suggest that Macron will leave the country more competitive than he found it.
“Non, je ne regrette rien” may be a little too bold a swan song even for Emmanuel Macron. The outgoing French president rarely dwells on his mistakes. But with markets increasingly nervous about the 2027 presidential election, Edith Piaf’s classic offers another useful reminder: starting again from zero is easier sung than done. Macron’s eventual successor may soon find out.
Our Chart of the Week tracks manufacturing unit labor costs since 1999. They measure employee compensation relative to what workers produce; slower growth therefore points to an improvement in labor-cost competitiveness. France entered Macron’s presidency in 2017 with manufacturing unit labor costs close to their 1999 level. Apart from a pandemic-era jolt, they have remained remarkably restrained despite recent inflation shocks. By the latest 2026 readings, France’s manufacturing unit labor costs were only about 12% above their 1999 average, compared with increases of about 26% for Germany, 44% for Spain and 61% for Italy.[1]
Macron cannot claim all the credit. For much of the period before Macron’s election in 2017, compensation had risen only moderately relative to productivity. The cost position of French manufacturers relative to many peers has continued to strengthen since. That is easy to miss. In a period of widespread inflation, relative cost restraint is less conspicuous than an outright decline.
Nor does the chart capture the whole economy: services account for far more of French output, while unit labor costs say nothing directly about product quality, energy prices or margins. Even so, the longer-term trend is striking. Labor-market reforms made hiring and dismissals less cumbersome, while business taxes fell. Macron’s 2023 pension reform sought to keep older people in work for longer, although its phase-in has since been suspended until after the 2027 election. By 2024, employment and business creation had risen substantially, while Paris had strengthened its position in technology and finance.[2]
“France’s manufacturing sector has preserved its labor-cost competitiveness far better than the political narrative suggests,” says Ulrike Kastens, Senior Economist, Macro Research at DWS. “Investors assessing France’s next political chapter should not overlook the competitive base that Macron’s eventual successor will inherit.” This legacy includes both gains and grievances. Markets may dwell on the latter, but they should not ignore the former.
Sources: Haver Analytics Inc.; DWS Investment GmbH as of 07/13/2026
* Own calculation, data has been seasonally adjusted and smoothed
This information is subject to change at any time, based upon economic, market and other considerations and should not be construed as a recommendation. Past performance is not indicative of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect.