France’s construction sector is in recession

France’s construction sector is in recession, and the economic context for the industry remains unfavorable, despite slowing inflation and some weakening of the credit market. This is reported by Kallanish with reference to the French Construction Association (Fédération Française du Bâtiment (FFB).

The FFB gives a negative forecast for the current year, in particular, noting the poor situation in the new housing construction sector. Over the past three months (through February 2024), new construction fell by 23% year-on-year.

According to the industry association’s report, the dynamics of new housing sales do not indicate improvement in the short or medium term. Overall, private sector housing sales fell by 44.1% year-on-year in 2023. Construction of individual houses in the period decreased by 41% y/y.

The FFB confirmed that the crisis in all segments of construction, including non-residential, continues to accelerate.

At the same time, the association notes that prices for raw materials and energy are generally stabilizing, and delays in payments by customers are decreasing.

According to French La Croix, last year, according to FFB, 13 thousand jobs were lost in the industry. According to the association, if the situation does not change, this figure may increase to 90 thousand in 2024 and 150 thousand in 2025. Olivier Salleron, President of the Fédération Française du Bâtiment, called on the authorities to take urgent measures.

Currently, orders for rebar remain weak across Europe as prices for these products decline and steelmakers cut production volumes. Market sources predict that orders will continue to stagnate in the second quarter of this year. Buyers of rebar and mesh in France intend to reduce purchases compared to 2022 and 2023.

Production in the EU construction sector increased by 1.3% in December 2023 compared to the previous month. Compared to December 2022, the seasonally adjusted figure increased by 2.4%, according to preliminary data from Eurostat. The average annual production in construction in 2023 increased by 0.1% compared to 2022.