Economic situation: New Habitat manufacturers sound the alarm

These companies are in fact heavily impacted by the housing and consumer crisis, increasingly restrictive regulations as well as the prices of certain raw materials which are still on the rise and services (notably transport and containers).

Industrialists in the housing sector are facing a critical economic context: sluggish economic growth, an unprecedented housing crisis – with construction starts for single-family homes divided by 3 in almost 5 years, a collapse in sales of new homes (-47% in the first half of 1 - source IGEDD) and transactions in existing homes down 2024% (source IGEDD) – as well as a market in recession (20% drop in turnover from the retail distribution channel from January to August 11,4 compared to the same period in 2024 (source Xerfi). Added to this is the crisis of confidence among households, who continue to save to the detriment of consumption. (According to INSEE, the French should save 2023% of their income by the end of the year. Their consumption has been at a standstill for three quarters).

The INOHA survey, whose objective is to monitor the economic health of its members, illustrates this situation well. Indeed, 81% of respondents recorded a drop in activity, including 22% of more than -10%, during the first 8 months of 2024 and believe that this trend will continue in the last quarter. The year 2025 does not look much better since 40% of them estimate a change in their turnover between -10% and 0%. Furthermore, the results of the survey specify that their concerns, for the coming months and for the year 2025, mainly concern the drop in activity (84,6%) and the real estate crisis (66,6%), for which INOHA expects the Government to have an ambitious housing policy so that it is favorable to both the well-being of the French and the sector. In addition, for 25% of respondents, their margin rate in 2024 is decreasing and 37% see their cash flow deteriorate.

The study conducted by the Codinf company, based on a careful examination of the financial statements of the members of our association, highlights a significant deterioration in their economic health over the last 18 months. Their Ellisphère solvency rating has thus fallen by 0,5 points over this period, reflecting several worrying factors: increased cash flow tensions (40% of them report a decline in cash flow), increase in Working Capital Requirement (WCR), increase in payment incidents.

In parallel with this context, despite the drop in the price of energy and certain raw materials in 2024, manufacturers in the housing sector are facing a significant increase in their costs:

• Salary costs:
• Median real wage increase in 2024: +3,8% (source: Willis Towers Watson)
• Revaluation of the minimum wage: +1,13% in January 2024, +2% on November 1, 2024
• Services :Increase in the Syntec index: +3,5% expected at the end of 2024 (source: Xerfi)
• Raw materials :
• Copper: +5,2% over the first 8 months of 2024 (source: Usine Nouvelle)
• Aluminum: +3,1% (source: Usine Nouvelle)
• Transport:
• Sea freight: +26,3% over the first 8 months of 2024 (Harpex Index)
• Road transport: +2,6% (Source: CNR)
• Commercial leases:Commercial rental index: +4,59% over one year in Q1 2024, +3,73% in Q2 2024 (source: INSEE)
• Investments in the ecological transition:New regulations in 2025 (RDUE, CSRD, carbon tax at borders, etc.) will result in significant compliance costs.

This accumulation of charges, in a tense economic context, exerts significant pressure on the margins of Industrialists. They occur in an uncertain geopolitical context and at a time when the government plans to adopt reforms impacting their competitiveness.

Faced with these challenges, the Industrialists of New Habitat are working tirelessly to find innovative and sustainable solutions, while safeguarding French jobs and know-how, to continue to offer consumers a suitable offer.

INOHA's member companies, mainly SMEs based in our regions, represent a significant economic force in France. With nearly 500 sites and 50.000 employees, they play a crucial role in local employment. Their average turnover amounts to 35 million euros, and together, they represent a significant share of a market worth 68 billion euros through various distribution channels, such as DIY superstores, building materials dealers and garden centers.

For Jean-Luc Guéry, President of INOHA: "A drop in prices will not necessarily stimulate consumer demand. It is confidence and housing that must be revived as well as the desire of consumers to re-enter our customers' homes thanks to jointly constructed commercial promotions. This period requires more than ever a collaborative approach between manufacturers and distributors to guarantee the balance of the sector and create quality, innovative and sustainable products."