The construction industry enters into recession and anticipates the loss of 150.000 jobs by 2025

The construction sector, very affected by the new construction crisis, anticipates the elimination of 150.000 jobs by 2025 and a drop in activity for 2023 in France, the president of the French Building Federation announced on Wednesday September 13 ( FFB).

"By 2025, if nothing is done, so if we allow the new construction crisis to take hold, building activity will decline by around 8% excluding the price effect, or 14 billion euros in less. This will result in a real increase in insolvencies and a fall in employment, with nearly 150.000 job losses,” Olivier Salleron declared at a press conference.

The FFB, which in the spring expected 100.000 job losses by 2025, had already raised this figure to 135.000 at the beginning of July, after the government announced the gradual end of the Pinel system to support new construction and the tightening of the zero interest loan (PTZ) for home ownership.

If the end of the year still benefits from order books "which remain at a good level", the sector is however revising downwards (-0,2% in volume) its 2023 forecast for the entire building activity, whereas it previously expected +0,7%.

“We are entering recession at the general level for this year 2023, which was not planned,” insisted Mr. Salleron.

In detail, new construction fell more than expected (-3,1%) mainly due to housing (-5,1%). New non-residential construction remains almost stable while improvement-maintenance, which represents more than half of the sector's activity, is doing well (+2%).

In new housing, construction starts fell 16,9% over the first seven months of 2023, compared to the same period of the previous year. A movement which, according to the FFB, can "only increase", since building permits fall by almost 28,3% and sales of individual houses, by 38,1%.

If business failures remain contained, at 4,6% below their level of the first eight months of 2019, they increase “by almost 39% between the first eight months of 2022 and 2023”, warned Mr. Salleron.

The only positive elements are the return of public procurement (administrative buildings, schools) and the almost doubling of MaPrimeRénov', the government's flagship system for supporting energy renovation.

To limit the scale of the crisis, the FFB is calling in particular for the redeployment of the PTZ over 40% of the territory and the revaluation of its scales.