Building craftsmanship accelerates its growth in Q4 2020 despite a chaotic year

It increased by + 0,5% in the 3rd quarter, then accelerated in the 4th quarter with a growth of 1,5% driven in particular by the increase in activity in new buildings (+ 2,5% against + 1% in the 3rd quarter) and a more measured increase in maintenance improvement (+ 1% against 0% in the 3rd quarter).

This end of the year benefited from a catching-up effect compared to the 1st confinement. According to the survey carried out by CAPEB among its members, 99% of companies thus declare that they were able to continue their activity during the second confinement.

The end of the year benefited from a catch-up effect following the first confinement: 74% of companies declare a production capacity greater than 90%. This dynamic thus makes it possible to limit the sharp drop in growth expected over the year 2020 with a negative result of -9%, a relatively lower figure than the situation in the first half of the year suggested.

However, CAPEB remains cautious and alert to the drop in authorizations and building permits to be expected in the coming months, which will weigh heavily on this growth dynamic. Indeed, from December 2019 to November 2020, 389.000 housing units were authorized for construction, i.e. 51.500 less than during the previous 12 months.

“2020 has been a complex year for our companies, especially in the first half of the year. Our companies have been able to organize themselves. After a chaotic year 2020 and activity supported by government measures, the economic environment in 2021 remains uncertain at this stage, particularly with regard to purchasing power and household confidence. However, the savings accumulated by households in recent months and the implementation of the France Relance Plan are all elements that could support the building economy in the coming quarters. The year 2021 could then record growth between 5 and 6% in the building trades, which would be more akin to a technical rebound than a real recovery in the economy before the Covid crisis. While activity accelerated in the second half of the year, however, corporate margins remain constrained. The financial situation of companies therefore remains fragile. In this exceptional context, it is important that rating and credit organizations adapt their assessment criteria. ".
Jean-Christophe Repon, President of the Confederation of Crafts and Small Building Enterprises (CAPEB)

Economic situation in the 4th quarter of 2020: a rebound in growth driven by the continued activity of artisanal construction companies during the 2nd containment

The volume of activity of craft construction companies increased by 1,5% in the 4th quarter of 2020 (compared to the same quarter of the previous year), whatever their size. The maintenance-renovation activity recorded a measured growth of 1% in the 4th quarter of 2020. At the same time, the work to improve the Energy Performance of Housing recorded a slight increase of 0,5% equal to the quarter. of the previous year. An increase in growth this quarter which should not obscure a marked decline of -9,3% for companies with less than 10 employees and -7,7% for companies with 10 to 20 employees in 2020.

A particularly observable rebound in new and maintenance-renovation

The new one - New construction activity is accelerating with growth of 2,5% (compared with 1% in the previous quarter), notably supported by very good weather conditions and the possibility for the vast majority of craft construction companies to continue their activity during the 2nd confinement. Note, however, a decrease in authorizations and building permits: in the 4th quarter, 51.500 fewer housing units were authorized compared to the same quarter of 2019. At the same time, 381.900 housing units were started, i.e. 24.200 less (-6,0%) than during the previous 12 months.

The former - the maintenance and renovation activity is also more dynamic with growth of 1% this quarter (against 0% in the previous quarter). The work to improve the Energy Performance of Housing grew by 0,5%, as in the previous quarter. The progress of work to improve the energy performance of housing should be reinforced with the ramp-up of Ma Prim 'Rénov: the ANAH had received 170.000 requests in mid-December.

Evolution in the professions

Over the last 3 months of 2020, the volume of activity increased for all the trades. Masonry recorded the most dynamic growth with 2,5%, while the increase reached 1,5% for roofing-plumbing-heating and carpentry-locksmithing. With growth of 1% and 0,5%, electricity and planning-decoration-plastering recorded more moderate growth.

A fragile cash flow situation

26% of professionals report a deterioration in their cash flow in the 4th quarter (against 18% in the same quarter of the previous year) and only 4% an improvement. At the same time, 43% of them declare a need greater than 10.000 euros. In January 2021, the average amount of cash flow requirements of these companies decreased to € 16.000 (compared to € 23.000 a year earlier). In the 4th quarter of 2020, 20% of companies declared a drop in margins, against 2% an increase, i.e. a balance of opinions of -18 points, down compared to the previous quarter (-13 points).

The amounts of credits granted

For the purchase of a new home, they fell by 10,5% in the 2nd quarter of 2020 (compared to the same quarter of the previous year). The same is true for loans intended for the acquisition of old housing, which recorded a decrease of 4,5% and loans intended for maintenance-improvement works with a decrease of 0,8% compared to the same quarter of the previous year. Overall, the amounts of loans granted decreased by 5,6% compared to the second quarter of 2. The savings rate fell and stood at 2019% after 16,5% in the second quarter of 26,5 due to the rebound in household consumption. However, it remains above the 2020 average level (2019%).

Employment and hiring intentions

Salaried employment in the construction industry stood at 1.446.800 in 3Q2020, or + 2,1% over one year (against -0,8% in all sectors). This represents 30.200 additional jobs in the construction industry. Salaried employment increased by 1,3% in the third quarter of 3 after 2020% in the previous quarter. In the third quarter of 0,2, the construction sector totaled more than 3 temporary jobs (full-time equivalent jobs) against 2020 in the same quarter of the previous year. Temporary work is therefore down (-133.600%) compared to the same quarter of the previous year. The rate of temporary employment (weight of temporary employment in total salaried employment) is 150.000%.

Territorial dynamics (activity in the regions) In the 4th quarter, regional developments turned out to be more different than in the previous quarter. The recovery is therefore accelerating on the Atlantic coast as well as in the Center-Val de Loire, the Grand Est and Hauts-de-France. The PACA and Occitanie regions also ended the year sharply (+ 4% each). On the other hand, activity remains down in Île-de-France (-0,5%) while it deteriorates in Auvergne-Rhône-Alpes (-1%) and in Bourgogne-Franche-Comté (-1,5, XNUMX%).