French construction sector outlook improves significantly

French construction industry business managers’ opinion about the sector improved significantly in December, according to a l’Institut National de la Statistique et des Études Économiques (Insee) report monitored by Kallanish.

The outlook for expected activity in the next three months is considerably more optimistic compared to November. Slightly more business managers in the building industry than in the previous month reported that their recent activity increased over the past three months, the report says.

In December, the balance of opinion of business leaders on employment prospects for the next three months continued its recovery which began in June, and therefore remains above its average.

Also last month, slightly more construction companies than in November considered that their order books were higher than normal. Given their present staff size, companies consider that their order books provide 8.2 months of work, slightly more than in November and much more than the long-term average, Insee explains.

Last month, however, the capacity utilisation rate fell despite remaining above its long-term average. At the same time, production bottlenecks have loosened and concern 36% of the construction companies surveyed, a much lower share than the November figure of 41%.

The share of construction companies reporting to be hampered from increasing their production due to workforce shortage fell again slightly in December, while remaining above its long-term average, the report concludes.