A “gray September” for construction materials

However, if this movement of disinflation suggests the end of the cycle of monetary tightening, it does not guarantee easier access to bank credit. This context, combined with a scarcity of public housing support systems, is plunging the building sector into a deep slump, dragging down the upstream (materials) and soon downstream (real estate, maintenance, etc.) sectors in its wake. In public works, the resilience of private and public clients whose investments are punctuated by major projects and the electoral cycle allows activity to continue but the dynamics of the works remains very heterogeneous depending on the territories and their specialty. And for the moment, demand for aggregates seems little mobilized by construction sites while that of BPE is suffering from the construction decline.

In the third quarter, production of aggregates and BPE stopped deteriorating compared to the second quarter at -0,6% (Data: CVS-CJO).

The summer clearing did not last

After a summer break where volumes stopped falling month by month, provisional data for September once again suggest a significant decline in materials activity.

In the aggregates segment, production contracted by -4,8% compared to the month of August (CVS-CJO data), leaving its level -6,5% below that of a year ago. The summer lull allows the third quarter to almost stabilize compared to the previous quarter (-0,6%) and to limit the decline over one year to -4,5%.

Thus, over the first nine months of the year, the aggregates activity lost -7,3% year-on-year, with the cumulative figure over twelve months showing a drop of -6,6%. On the BPE side, the observation is identical.

After three months of stabilization, or even an increase, BPE deliveries returned to a decline, of -3,5% compared to August and -6,7% compared to September 2022. Just as for aggregates, the The activity of the third quarter is almost in line with that of the second quarter (-0,6%), remaining at levels -4,8% lower than those of the third quarter of 2022.

BPE production over the first nine months of the year and cumulative twelve months, however, fell a little less than for aggregates (-5,7% and -5,9% respectively, year-on-year).

The materials indicator, still provisional for the third quarter, reflects similar trajectories. After a second quarter down -7,4% year-on-year (CJO data), activity in the basket of materials stabilized this downward trend in the third quarter (-7,2%). Over the first nine months of the year, the indicator shows a contraction of -8,3% year-on-year, with certain materials, such as tiles and bricks, particularly exposed to the very poor economic situation for individual homes, recording declines at two digits.

Building: chronicle of a predicted crisis

The deterioration of indicators and surveys carried out among building professionals is confirmed over the months and is increasing. In October, the business climate measured by INSEE worsened further: the balances of opinion, on past and future activity, have now fallen below the symbolic threshold of long-term averages.

In structural work, the balances of opinion on planned activity and the judgment of order books literally dropped in October, well above their long-term averages. Certainly, order books in this sector still show 8,9 months of activity (compared to 7,4 months on average over 20 years) but their erosion continues and could accelerate if recent developments are to be believed. of the opinions of professionals in their notebooks.

In this context, tensions on the productive system continue to moderate, gradually reaching levels close to normal, except for personnel where some tensions still remain, while the evolution of forecast prices continues to ease. . These trends echo other indicators on construction and real estate, recently published, and which confirm the slump in the sector.

The latest survey conducted by INSEE among real estate developers indicates that in October the prospects for housing starts reached their lowest level in history!

The slight rebound in the “intended for rental” segment (undoubtedly linked to the anticipation of the expiry of the Pinel system at the end of 2024) fails to compensate for the plunge in the accession segment. The reluctance of developers only responds to the particularly gloomy situation for sales of new housing: during the third quarter in fact, according to data from the ministry, reservations for apartments and individual houses fell again, by -12,1, 40% compared to the previous quarter (CVS-CJO data), which brings the decline in sales to -16.201% over one year (i.e. XNUMX units).

On the CM side (diffuse individual segment), the observation is identical with a drop of -38,6% over one year at the end of September (i.e. 66.800 houses to be built over one year, a level halved compared to the long-term average). term). This collapse in sales is coupled with a severe contraction in supply which reached nearly -33% over the year at the end of September (including -54,8% for individual houses and -31,4% for apartments). . In a stalled market where unsold stocks are increasing (+16,7% over one year, or 131.400 homes, the majority of which are still in the planning stage), new property prices are moderating. Slightly down for apartments (-0,9% compared to the previous quarter but +1,1% over the year), they however continue to increase for houses (+1,1% in the third quarter compared to +2,7 .XNUMX% over the year). But this lull in new property prices will not be enough to revive demand.

Indeed, faced with housing shortages, in the free sector as in the social sector, the wait-and-see attitude of developers and investors and the scarcity of supply should maintain a market imbalance favorable to high prices. For the moment, housing starts continue to plunge: at the end of September and over three months, they contracted by -21,7% over one year, bringing the total over twelve months to 315.800 housing units. And there is little to hope for in terms of authorizations which fell by -29,2% over one year over the last three months, as much as the trend over twelve months (-28,3% with 371.800 permits). ). Long resilient, the business premises sector is in turn unraveling with a drop in construction site openings of -11,8% year-on-year over the last three months and a decline in permits (-6%).

Public works: the only good news?

In the midst of this construction crisis, the scale of which is aggravated by the conjunction of financial, cyclical and institutional factors (with a procyclical policy led by the executive), public works stand out with a more positive balance sheet. . In the FNTP quarterly survey for the month of October, professionals appear more confident about their future activity, both with private and public clients. They also judge their recent activity more favorably even if the books are replenished less than this summer, while remaining above the long-term average. From January to September, the work carried out increased by +4,8% over one year (in volume, CVS-CJO) and the contracts concluded increased by +13%, including an increase of +5,3% in the third quarter. This dynamic is encouraging but does not concern all territories or all professions. Mainly focused on civil engineering/collective transport and energy, these projects are currently concentrated in large metropolises and urban centers.

Illustrative image of the article via Depositphotos.com.