French construction outlook remains optimistic

French construction industry managers’ confidence over future activity held up in July, according to a l’Institut National de la Statistique et des Études Économiques (Insee) report monitored by Kallanish.

This month French construction companies’ general outlook for the sector improved sharply as business managers are more optimistic regarding their activity over the next three months. In July more business managers than last month consider that the level of their order books is higher than normal as their order books provide 8.5 months of work, significantly above the long-term average of 5.8 months.

The capacity utilisation rate this month also increased, and stands above its long-term average. At the same time, production bottlenecks have increased as almost half of the companies surveyed have reported bottlenecks. “The share of business managers who consider that they are unable to increase their production due to a lack of staff is stable, at a high level,” Insee reports.

This month however the cash-flow position of construction companies has slightly deteriorated despite the balance of opinion on payment periods from their clients remaining stable. More business managers than last month also announced that they will increase their prices over the next three months.

French rebar and reinforcing steel prices remain stable after they increased slightly this month on costlier scrap. Long product sales activity is now becoming quiet as the summer break starts in France at the end of this week.

Natalia Capra France