FFB: Recession hits French construction, outlook remains gloomy

The crisis in the French construction industry worsened in 2024, especially in the private residential sector, which was undermined by reduced new construction and the non-residential sector, French construction federation Fédération Française du Bâtiment (FFB) says in a report obtained by Kallanish.

“After an erosion of activity in 2023 (-0.9%), the construction sector entered full recession in 2024,” FFB comments. The industry, encompassing all segments, experienced a 6.6% decrease in volume last year. The number of building site openings for new construction saw a significant decline of 14.2%, following a substantial decrease of 24.9% in 2023, resulting in a historic low of 253,000 units. “You have to go back to 1954 to find such a level!” FFB exclaims.

The construction of new individual houses experienced a significant decline by 23.7%, resulting in fewer than 100,000 units. Overall, new housing activity plunged 21.9% in 2024. The production of new non-residential buildings also endured a year-on-year decline of 7.4%, with all segments reflecting a notable decrease, except for public buildings, which remained stable.

The outlook for 2025 appears gloomy, with a projected contraction of 5.6% in volume, primarily driven by challenges in new construction activities. Expected new housing activity is projected to decline by 14.2% in 2025, leading to a new low in construction site openings at 239,000 units.

Despite an anticipated macro-financial climate improvement, FFB predicts a 15% decline in individual home sales and a 30% decline in developer sales to individuals. Activity in new non-residential properties is also expected to drop by 15% in 2025, influenced by general uncertainty and unappealing credit conditions.

The French long steel market’s performance remains unimpressive as the construction industry continues to perform poorly. French long steel prices have remained stable since the beginning of January; however, there is a noticeable absence of large-volume sales, and the upward price attempts from some mills are lacking momentum.

A source within a purchasing group indicates the outlook for the first half remains pessimistic. He suggests ongoing financial difficulties faced by multiple service centres and distributors, alongside persistent margin compression.

Natalia Capra France