300.000 jobs at risk in construction: the failure of a policy according to the FFB

The collapse of the new continues

Month after month, the plunge into the abyss of new housing accelerates. Taking into account the recent revision of official data, construction starts fall by 5% in 2022, then by 24% in 2023 and again by 23% year-on-year over three months at the end of January 2024. However, the evolution of housing sales does not allow any hope of improvement in the short or medium term: they drop 24% in 2023 on the real estate development side - and even 38% excluding block sales -; they collapsed by 41% year-on-year over twelve months to the end of January 2024 for the construction of individual houses. The FFB therefore confirms its forecast of a real crash in 2024, at around 250.000 housing starts, i.e. a ratio of 8 housing starts per 1.000 households in France... as at the very beginning of the 1950s!

The situation for new non-residential properties is barely less bad. Year-on-year over twelve months to the end of January 2024, the surface areas started fell by 15%. As expected, the fall is accelerating, especially since the data from the last three months indicate a further decline over one year of 15% in authorized areas. In addition, all market segments are now participating in the overall movement. The exception of administrative premises may not be followed up since permits fell by 7% over the same period. The big plunge towards a year 2024 defining a historic low at 22 million m2 under construction is therefore, once again, confirmed.

A heavy threat avoided on improvement-maintenance

The start of 2024 proved to be quite chaotic on the renovation market. The fall in existing property transactions, both in housing and non-residential properties, constitutes a very unfavorable backdrop. Added to this was the catastrophic impact of the profound transformation of MaPrimeRénov'. While the financing of the approach by gesture(s) is very clearly reduced in favor of the overall renovation, the latter comes up against a far too small volume of Mon Accompagnateur Rénov, an imperative point of passage. The result is known: in January-February 2024, the number of bonuses granted fell by three-quarters in one year. The 2024 scenario of small growth in improvement-maintenance activity retained by the FFB and, beyond that, the very objectives of ecological transition risked becoming like sweet dreams.

Faced with the predicted catastrophe, the Ministers of Ecological Transition and Housing, Christophe Béchu and Guillaume Kasbarian, finally heard the FFB and announced a significant relaxation of access to MaPrimeRénov', in particular by re-expanding the scope of the approach by gesture(s). The FFB welcomes this welcome revision, while emphasizing that its operational translation will take a few weeks. During this time, the market will remain calm. Most likely, the increase in activity that the FFB had planned for 2024 will therefore prove to be too optimistic, even though here lies the only vector of growth. In the shorter term, this situation weakens players, particularly artisans whose order books do not exceed a few months. Some of them could simply find themselves without work, particularly when they work in insulation or install heat pumps.

The production apparatus adapts

The rapid decline in activity, which began at the end of last year, is reflected in an acceleration of insolvencies. In construction, the increase is more than 40% year-on-year over three months at the end of January 2024. In addition, this movement concerns structural work as well as finishing work on the one hand, and all sizes of companies on the other. go.

Employment is also adapting to the new situation. The construction industry lost 3.300 jobs in 2023, including 1.900 salaried positions. And the movement is accelerating since between the fourth quarters of 2022 and 2023 alone, the decline reaches 13.300 positions. We do not yet have data for the start of 2024, but we can hardly identify any reason motivating an improvement in this situation. For the record, the FFB fears the loss of 90.000 jobs in the sector in 2024, if nothing changes.

The only good news is that the costs of materials and energy are generally stabilizing, which simplifies “fair” price calculations, and customer payment times seem to be reducing, after the sudden surge in summer 2023 which weighed on the treasuries.

How to get out of the rut?

Limiting the impact of this crisis requires acting as quickly as possible on the most reactive segment: improvement-maintenance. Hence the urgency of reforming the 2024 version of MaPrimeRénov' and ensuring real growth for MaPrimeAdapt', as well as the school renovation program (EduRénov).

It is also important to take full advantage of the easing which seems to be confirmed on the credit market. Especially if the decline in inflation is confirmed in the European Union and leads to a reduction in the ECB's key rates in the summer. Today, the risk lies in the fact that this improvement only benefits the best applicants, that is to say rather households with high incomes and often second-time buyers. Two measures would make it possible to avoid such a concentration: first, a broad reopening of the PTZ bringing it back at least to its 2023 scope; secondly, a relaxation of the fundamental rules of the HCSF, especially since there is still no risk of an explosion in the loss experience of real estate credit.

As crises have continued since the end of 2019, it is finally important to limit the risks of normative or regulatory destabilization. Beyond the simplification exercise announced by the Minister of the Economy, Bruno Le Maire, the FFB is therefore asking for a total moratorium in this field for a few years. This includes in particular the 2025 march of RE2020, which the federation wishes to even postpone to 2028, while the current rules rank France first in the world in terms of ecological performance of new construction.

These measures are all the more essential as the construction crisis is already heavily penalizing the French economy. In fact, according to INSEE's National Accounts, if investment spending on construction by households and businesses had simply remained at the same level in 2023, GDP would have increased by 1,3% and not by 0,9. .2024%. In other words, the construction crisis has cut the country's growth by almost a third. And this continues in XNUMX.

Illustrative image of the article via Depositphotos.com.