The French construction sector remains deeply depressed as employment falls and production remains subdued, French construction federation Fédération Française du Bâtiment (FFB) says in a report obtained by Kallanish.
“The conflicts in the Middle East, whose effects have been amplifying since the end of February, are translating into further deterioration for the construction sector. Global uncertainty among clients, the impact on material prices and deteriorating credit market conditions are all weighing on activity, which continues to decline,” FFB says.
France’s new construction sector remains depressed. The trend of the first four months of the year points to 321,000 new housing starts, some 35,000 units below the 40-year average.
Building permits are also down over the same period, with residential construction dragged down by a particularly poor April, which saw permits fall 30.1% on-year.
Further upstream, the pipeline is deteriorating as developers’ sales, already at low levels, continued to decline, falling 1.8% on-year. New non-residential construction also continues to lag while employment in construction fell in Q1 for the 13th consecutive quarter.
High payment delays from public sector clients persist, and operating margins in construction have fallen by 0.6%. Insolvencies in the sector, still at elevated levels, edged down 3% year-on-year over the five months to May, Kallanish understands.
Orders for concrete steel remain weak and supported by infrastructure financed by the European post-Covid recovery fund. According to rebar buyers, prices are stable on-week but declined this month by some €20/tonne ($22.9/t) reflecting the weak demand. Prices are now at €690-700/t delivered. Buyers believe values should remain stable at the current levels ahead of the August break. This week the market is uneventful due to the current extreme weather conditions (see separate article).
Author: Natalia Capra
