Construction: for the FFB, the 2027 Finance Bill is "the last chance" to stop the crisis

The draft finance bill (PLF) for 2027 constitutes, according to the French Building Federation (FFB), a decisive deadline for a sector facing a decline in activity, weakening cash flow and a further decline in employment.

The Federation had already warned in June about the potential consequences of the crisis in the Gulf of Hormuz and the government's budgetary choices. It now believes that all major construction markets are experiencing a downturn, while INSEE (the French National Institute of Statistics and Economic Studies) forecasts limited growth of 0,4% in 2026. The decline in construction investment is expected to affect households, businesses, and public administrations alike, particularly due to the municipal election cycle.

In this context, the French Building Federation (FFB) reiterates that housing remains a significant source of public revenue. According to the housing budget, taxes and levies related to the sector reached €103,4 billion in 2025, compared to €45,9 billion in subsidies, representing a gap of €57,5 billion. The Federation believes that the policies pursued since 2017 have contributed to plunging the housing sector into a persistent crisis.

Activity is expected to decline by 0,3% in 2026

The French Building Federation (FFB) now forecasts a 0,3% decline in construction sector revenue in 2026, excluding price effects. Over four years, the drop would reach 12,3%, bringing activity back to a level comparable to that of the late 1990s.

This contraction would lead to the destruction of 20.000 jobs by 2026, including salaried employees, temporary workers (in full-time equivalent positions), and self-employed workers. The total loss would approach 60.000 jobs over four years.

New housing: construction site recovery deemed fragile

In the new housing sector, construction starts are increasing, but the Federation considers this trend temporary. Their number is expected to remain slightly below 300.000 in 2026, approximately 60.000 units less than the average observed over the past forty years.

This level also remains far from the 420.000 new homes per year that the French Building Federation (FFB) estimates are needed based on the work of the Ministry of Housing. Under these circumstances, it considers the government's target of 2 million new homes by 2030 to be unattainable.

The crisis in new construction has already cost the State nearly 5 billion euros in VAT revenue between 2022 and 2025, according to calculations by the Federation based on the housing account.

Leading indicators are also deteriorating. According to data cited by the FFB, building permits declined by 0,2% year-on-year in the first seven months of 2026. In the last three months available, the decrease reached 8%, with a drop of 16,6% in multi-family housing.

The Federation also notes that sales by home builders and developers have fallen from an annual average of nearly 322.000 units over the period 2018-2022 to 175.000 over the period 2022-2026, representing a drop of 46%. Meanwhile, mortgage lending for new housing is estimated to have declined by 20% year-on-year over the three months ending August 2026.

These trends suggest a further decline in housing starts in 2027, in a context where the housing crisis is expected to play a significant role in the presidential campaign.

New non-residential construction is also losing ground

In the new non-residential sector, the area started remains close to its historical low. It barely exceeds 20 million square meters on trend, compared to a long-term average of 31 million square meters.

The authorized surface areas decreased by 6,7% between the first seven months of 2025 and those of 2026. Administrative premises in particular recorded a drop of almost a third, which the FFB links to the slowdown in investments by local authorities after the municipal elections.

The Federation regrets that public procurement is no longer playing its countercyclical role while most other markets are declining. It therefore anticipates a decrease in the amount of floor space started, followed by a decline in new non-residential construction activity in 2027.

Energy renovation continues its decline

Improvement and maintenance, which represents about 60% of building activity, declined by 3,3% in volume between the second quarters of 2025 and 2026. According to the FFB, this is the seventh consecutive quarter of decline, both in housing and in non-residential.

Energy renovation contracted by 4,3%. The decline reached 4,5% in housing and 3,5% in non-residential buildings, which had previously been more resilient.

In this context, the Federation criticizes the new decisions concerning MaPrimeRénov' and the Green Fund. It believes that energy renovation must remain a priority, especially after the exceptional weather events of the summer.

Material prices are putting pressure on profit margins.

In addition to the decline in activity, there are the consequences of the conflict in the Middle East on production costs. Between February and June or July 2026, the INSEE indices cited by the FFB show increases of 35% for bitumen and non-road diesel, of more than 20% for diesel at the pump, PVC products and cellular plastics, as well as increases close to 10% for certain plastic profiles, steel products and wood panels.

The "materials" component of the BT01 index reportedly increased by 4,3% between February and June, 3,3 times faster than general inflation. However, tradespeople and contractors are finding it difficult to pass these increases on to their customers, thus squeezing their profit margins.

Businesses are also still being penalized by payment delays. The FFB points to delays in public procurement, to which are gradually being added those from some private clients.

Fewer failures, but larger companies affected

Business failures, including reorganizations and liquidations, decreased by 4% between January and August 2026 compared to the same period in 2025. The FFB nevertheless predicts that around 12.000 construction companies will be affected throughout the year.

The Federation is particularly concerned about the increase in proceedings targeting larger organizations. These are expected to rise by 30% among companies with 20 to 49 employees and by 21,1% for those with more than 49 employees.

Nearly 15.000 jobs lost in the first half

Between the first halves of 2025 and 2026, the construction sector lost nearly 15.000 jobs. The decrease of 16.500 salaried positions and 3.600 temporary positions (full-time equivalent) was only partially offset by the creation of 5.900 self-employed jobs.

The decline particularly affects 15-29 year olds and apprenticeship contracts. The French Building Federation (FFB) therefore contests the reduction in apprenticeship subsidies and calls for a stabilization of the budgets allocated to this program in 2027.

The decline in employment could accelerate further with the anticipated contraction in economic activity. For 2026, construction companies are expecting a 16,4% drop in hiring, compared to 6,5% for the economy as a whole.

The 2027 Finance Bill at the heart of the FFB's demands

To address the crisis, the Federation is primarily focusing on the draft law aimed at revitalizing and decentralizing housing, which was submitted to the National Assembly in June 2026. It hopes that the "Jeanbrun" tax incentive will be improved for existing properties and extended to new single-family homes. It is also calling for the launch of the third National Urban Renewal Program (ANRU III).

The second lever is the 2027 Finance Bill, whose adoption, according to the FFB, should avoid the need for a new "special law" that could delay or block support measures. The FFB specifically requests:

• not to reduce the zero-interest loan (PTZ);
• not to raise the solidarity rent reduction (RLS) imposed on social landlords;
• to relax the parameters of the "Jeanbrun" scheme in order to enhance its attractiveness;
• to extend to overseas territories the zero-interest loan (PTZ) dedicated to the acquisition of older housing;
• to maintain the commitments dedicated to MaPrimeRénov', energy saving certificates (CEE) and the Green Fund at the level provided for by the initial finance law for 2026.

Mortgage loans, RE2020 and Action Logement

In addition to budgetary measures, the French Building Federation (FFB) is calling for a relaxation of the rules set by the High Council for Financial Stability (HCSF) governing mortgage lending. It is particularly targeting the 35% debt-to-income ratio cap, which it considers too restrictive for creditworthy households and for stimulating the market.

The Federation also calls for a review of the 2020 environmental regulations (RE2020). It proposes suspending the planned phases for 2028 and 2031, while working towards better consideration of summer comfort. It believes that each new phase increases construction costs and reduces household purchasing power.

In the context of discussions on the next five-year Action Logement agreement, the FFB (French Building Federation) hopes that social partners will prioritize productive investments in local areas. It advocates for the construction and renovation of housing near employment centers and reindustrialization projects.

Electronic invoicing: incorporating the specific characteristics of works contracts

The e-invoicing reform entered its first phase on September 1, 2026. All businesses must now be able to receive electronic invoices, while the obligation to issue them initially applies to large and medium-sized enterprises. It will apply to small and medium-sized enterprises (SMEs) and micro-enterprises from September 1, 2027.

The French Building Federation (FFB) requests that the system genuinely contribute to reducing payment delays and identifying late payers, whether public or private. It also wants the procedures to take into account the specific characteristics of construction contracts.

• advance payments and progress reports;
• the final general accounts (DGD);
• retention money and performance guarantees;
• subcontracting and joint contracting;
• direct payments and payment delegations;
• VAT self-assessment.

The Federation advocates for a simple, clear system with no additional costs for businesses, accompanied by a grace period in case of deployment difficulties.

A rejection of the reform of the REP building

The final point of contention is the extended producer responsibility scheme for building construction products and materials (EPR PMCB). The French Building Federation (FFB) believes that the proposed reform does not address the difficulties companies face in collecting and disposing of waste.

According to its estimates, withdrawing from the sectors considered mature was expected to reduce the cost of the system to €325 million. The proposed new plan, however, would raise it to €600 million, without guaranteeing a sufficient improvement in service. The Federation therefore indicates that it will oppose this reform in its current form.

As the budget debates approach, the French Building Federation (FFB) announces an aggressive campaign. It intends to place the 2027 Finance Bill at the heart of its discussions with the government and parliamentarians, before housing policy and the state of the construction sector become issues in the presidential campaign.