Sentiment among French construction companies improved slightly in August. According to L’Institut National de la Statistique et des Études Économiques (Insee), construction companies active in both structural works and finishings reported a slightly more positive business climate and an improved attitude towards their future but also their past activity.
The sentiment improvement however remains moderate as “economic uncertainty felt by construction managers is virtually stable”, says an Insee report obtained by Kallanish.
In August, construction companies’ order books are considered stable. Given their staff size, the firms surveyed reported eight months of work. Production capacity was stable on-month, while 44% of firms reported slowing output because of supply difficulties.
Production bottlenecks are continuing. The same number of business managers as in July are facing obstacles which limit their production capacity. About 18% of construction firms consider themselves unable to increase their production in case of additional orders due to a lack of personnel and supply difficulties. About 42% of companies reported being at the limit of their production capacity and 32% report they are facing “insufficient” demand. The production capacity utilisation rate has slightly decreased this month, Insee concludes.
The situation in France for steel consumption downstream continues to be subdued. The distribution sector is seeing a challenging year. The main concern revolves around tight margins, French distribution sources say.
Some improved demand has however been reported for rebar in July and August, with orders coming in and production levels rising slightly. Activity has not properly resumed this week after the August summer break. One distributor says buyers are now in a wait-and-see mood. Market participants expect a clearer direction next week.
Natalia Capra France
