Energy and metal prices rose sharply in 2026. This could affect manufacturers' financial results through to 2028, even though wholesale prices are expected to decline gradually from 2027 onwards. This was one of the key messages delivered by Jérémy Robiolle, Director of Development at the Xerfi research institute, who was invited by GIFEC to Lyon on 29 September to present the economic outlook and forecasts through to 2027–2028. Here are the main takeaways from his analysis, alongside the latest industry figures.
Energy Price Shock: Costs Will Continue to Be Felt Until 2028
This year, the conflict between the United States and Iran, together with the closure of the Strait of Hormuz, triggered another shock to energy and commodity markets. The question is when these price increases will be passed on to manufacturers' energy bills.
Oil and Gas: Sharp Increases in Market Prices
Brent crude oil exceeded $100 a barrel in April and May, reaching its highest level since 2022. Xerfi forecasts an average price of $87 a barrel for 2026, an increase of 27%, before a gradual return to $75 in 2027, provided oil shipments through the Strait of Hormuz return to normal.
Gas prices are following the same trend. On the European wholesale market, they are expected to rise by 32% in 2026. Europe is heading into winter with gas storage facilities only 57.1% full, compared with a five-year average of 74%. This is the lowest level since 2009. The risk of a second gas crisis therefore remains.
Electricity: Price Increases with a Time Lag
Driven by gas prices and demand peaks linked to the heatwave, electricity prices on the French wholesale market more than doubled between February and August, rising from €46 to €123/MWh on a monthly average basis.
Businesses will feel the effects, but with a delay. Most purchase their energy through multi-year contracts or on forward markets. Price increases are therefore passed on gradually.
According to the research institute, the average price paid by businesses (contracts above 36 kVA) is expected to have risen by 12.2% in 2026. A further increase of 15.5% is forecast for 2027, even as wholesale prices are expected to begin falling. The end of the ARENH mechanism at the end of 2025 is also contributing to this situation. France nevertheless remains better protected than Germany or Italy thanks to the availability of its nuclear power fleet.
Metals: Copper, Aluminium and Zinc Prices at Record Highs
Industrial metal prices are following a similar trajectory. For 2026 as a whole, Xerfi forecasts increases of 36% for copper, 25% for aluminium, 23% for zinc and 18% for European steel.
This surge is primarily due to a shortage of available metal rather than an increase in industrial demand. For manufacturers, raw materials are therefore becoming more expensive without a corresponding rise in orders.
Even if prices fall as expected from 2027 onwards, the decline is likely to remain limited. Copper, in particular, continues to be in high demand, as it is essential for power grids, electric vehicles and data centres.
Growth Is Losing Momentum in France and Worldwide
These pressures are slowing economic activity. Faced with uncertainty, businesses are postponing investment decisions. The institute has therefore revised down its growth forecasts for 2026.
Eurozone Growth at 1%?
Global economic growth is expected to have reached 2.4% in 2026 (compared with 2.7% in 2025), before improving slightly to 2.5% in 2027. Europe and major industrialised Asian economies, such as Japan, have been the hardest hit. The eurozone economy is expected to have grown by just 1.0% this year, and Japan's by 0.7%.
The situation could deteriorate further due to several factors: political uncertainty in Europe and the United States, the potential introduction of tougher protectionist measures, or a stock market correction in technology shares if artificial intelligence fails to deliver the expected results.
European industry also faces pressure from Chinese exports, redirected towards Europe in response to US trade barriers.
The French Economy: Stagnation and a Wait-and-See Approach
For France, Xerfi forecasts growth of less than 1% in 2026, followed by a slight improvement in 2027.
Investment is expected to have declined slightly this year, weighed down by the construction sector, while businesses are freezing capital expenditure as they wait for a clearer economic outlook.
The 2027 elections and the state of public finances are reinforcing this wait-and-see approach. Borrowing costs, meanwhile, continue to rise. On 22 October, the French government's 10-year bond yield reached 5.14% during trading, its highest level since 2002, according to Reuters. The spread over German bonds also reached its highest level since the eurozone sovereign debt crisis in 2011.
Business insolvencies have stopped rising but remain at a high level: 70,605 over the twelve months to the end of July, according to the Banque de France, 19% above the 2010–2019 average. They are increasing more sharply among SMEs than among micro-enterprises, raising concerns for both employment and their suppliers.
Aerospace Is Growing, While Automotive and Construction Are Declining
Behind these averages, the situation varies considerably from one sector to another. Xerfi outlined the outlook for three key markets for manufacturers and distributors of industrial supplies.
Aerospace: Key Drivers of French Industry
After two years of 12% growth, aerospace production is expected to have increased by 8% in 2026. The institute forecasts further growth of 6% in 2027 and 5.5% in 2028.
Alongside shipbuilding, rail and defence, aerospace is one of the sectors currently supporting French manufacturing output.
Automotive Production Declines Again
Xerfi has revised down its forecasts for the automotive industry to take account of the impact of the war in Iran on the European market. Production is expected to have fallen by 4% in 2026. The anticipated recovery in 2027 is likely to remain modest (+1.5%), before another decline in 2028.
Construction Faces a Tentative Recovery
Following a 3.5% decline in 2025, construction output is expected to have fallen by a further 2.4% in 2026. A slight recovery is then forecast, with growth of 0.5% in 2027 and 0.7% in 2028.
What GIFEC Members' Sales Figures Reveal
On the ground, the summer figures confirm this slowdown. According to GIFEC's latest economic outlook report, produced in partnership with the Xerfi institute, members' sales declined in July and August, with a marked contrast between sales through distributors and direct sales.
Distributor Sales Decline, While Direct Sales Hold Up
Across all product categories, members' sales were slightly below summer 2025 levels: down 4% in July and 1% in August. This decline was driven by sales through distributors (-7.8% in July and -2% in August), while direct sales increased slightly (+2.7% and +1%, respectively). Since the beginning of the year, revenue from distributor sales has fallen by 1.7%.
These findings are consistent with those of INSEE, which reported a deterioration in wholesale trade business confidence in September, with the index falling to 93, below its long-term average. In manufacturing, however, business confidence improved to 105, according to data published in October 2026.
Significant Differences Between Product Categories
Over the first eight months of the year, machining products performed well, with sales up 3.8% through distributors and 9.3% through direct channels. Personal protective equipment (PPE) also recorded growth in distributor sales (+2.3%).
Conversely, tools and assembly products declined across both channels (-3.7% through distributors and -5.1% through direct sales), as did mechanical power transmission products (-2.9% and -6.0%, respectively). Hydraulic and pneumatic power transmission products showed a more mixed performance, with a slight decline in distributor sales (-1.5%) but an increase in direct sales (+2.2%).
Understanding Market Trends to Better Anticipate Change
Costs are expected to remain high until 2028, alongside a gradual return to growth. In this context, a better understanding of market developments helps businesses adjust their decisions.
GIFEC monitors these trends throughout the year through its monthly economic outlook report and plenary meetings. Its Distribution Committee, launched in June 2026, is working in particular to improve the exchange of statistical data between manufacturers and distributors, especially for the economic outlook report.