The activity still holds
In addition, companies are resisting for the time being. While the reimbursement of PGEs has started, the number of defaults over the first four months of 2022, although it is recovering, is still 40% lower than that recorded over the first four months of 2019, i.e. before the crisis sanitary.
GDP and its components - © FFB from INSEE
As a result, employment continues to grow in the sector, by more than 8 jobs in the first quarter of 000. Since the first lockdown in spring 2022, the sector has never stopped creating jobs and posted 2020 more jobs, an increase of almost 86%, almost two percentage points more than the economy as a whole. This partly explains the recruitment difficulties, which are still particularly severe in construction. Despite this, the prospects for hiring on the horizon of the summer remain fairly well oriented.
Inflation rate in France - © FFB according to INSEE
But a materials crisis is still relevant...
The context is proving to be difficult, however, with a materials crisis that has no end. According to Insee data, between November 2021, the start of the energy crisis, and April 2022, the prices of steel for construction and aluminum semi-finished products increased further by 27%, those of tiles by 20%, those of PVC products by 16%, those of ceramic products by 12%, those of copper semi-finished products, glass or plastic products by almost 10%, etc.
Unemployment rate - © FFB according to INSEE
More generally, despite near-stability in the hourly cost of labor and under the effect of an average increase of 6% in the cost of materials used, the BT01 index calculated by INSEE, which summarizes all the costs of an average building company, is up +3% over the first three months of 2022, after more than +5% over the whole of 2021.
Rates and terms of real estate loans granted to individuals - © FFB according to INSEE
The litany of increases that have followed one another since the end of 2020 are obviously weakening construction companies. And in fact, in the first quarter of 2022, a clear deterioration in the operating margin of construction can be read in the quarterly accounts of the Nation published by INSEE. This observation confirms that the solidarity of the sector called for by the FFB for two years must imperatively become reality, both by temperance on the prices of materials and by the systematic insertion of price variation clauses.
Housing starts prospects expressed by developers - © FFB according to INSEE
… And fears about activity in 2023
The improvement-maintenance market, which represents around 54% of building sales, picked up a little at the start of the year. In fact, activity increased by 1,4% in volume compared to the first quarter of 2021, after +1,1% in the previous quarter. However, the rest of the year should still benefit from the momentum of MaPrimeRénov', which is undeniable, with 207 bonuses granted in the first four months of 000, i.e. +2022% over one year. It should however be pointed out that the deterioration of the CEE market and the instability of aid are holding back activity.
Sales of individual houses in diffused sector - © FFB according to INSEE
New non-residential is the good news of the moment. On a year-on-year basis over four months at the end of April 2022, the surfaces started and authorized there have recovered by 26% and 12%. However, these positive developments still keep the segment well below pre-health crisis levels.
Regional changes (in %, year-on-year) in new home sales - © FFB from INSEE
On the other hand, concern is growing on new housing in the medium term. Several players – including the FFB – have already signaled on numerous occasions that it is very likely to fall by the end of 2022. Recent figures confirm this risk, in particular with the end of the positive shock created by the anticipation of RE2020 in individual house. In fact, in this segment, permits fell 8% in April 2022 compared to April 2021, in line with the collapse in sales observed since the start of the year. Housing starts will follow in the coming months. As for the collective, housing sales continue to plunge and the situation is only improving temporarily on the permit side, under the effect of the anticipation of RE2020 here again.
Year-on-year change over 2022 months at the end of April XNUMX in housing starts
and housing permits (in %) - © FFB according to INSEE
The need to support a sector that drives the economy
It is not too late to raise the bar and ensure the necessary visibility for the sector. It is also essential since the building is now one of the few sectors to drive the economy and, even more, sustainable employment in France, while meeting real needs.
Evolutions (in volume) of the improvement-maintenance activity - © FFB according to INSEE
In a context of global economic upheaval, it is important to protect this key asset, especially since we will not succeed in the essential ecological transition without craftsmen and building companies present throughout the territory.
The Assises du BTP announced by Bruno Le Maire and desired quickly after the legislative elections are therefore timely. They will make it possible to address all the subjects of concern mentioned above.
Changes (in volume) in energy renovation activity - © FFB according to INSEE
It will be necessary to come back to the solidarity of the sector, including upstream (industrialists and distributors), and to the indexation of market prices, including financing methods. The subject of supporting companies' cash flow will also be discussed, with questions revolving around the extension of the reimbursement of PGEs, market advances, etc.
It will still be necessary to reflect on the financing of RE2020 and the indexation of aid (PTZ, MaPrimeRénov', CEE, etc.) in a context that is once again inflationary. This context also reinforces our request for the establishment of a generalized amortization mechanism in favor of private rental investment instead of tax exemptions.
Building company order books - © FFB according to INSEE
We will also include our request for legislative and regulatory temperance to avoid the excessive rapid accumulation of associated but unfunded additional costs (RE2020, ZAN, REP, removal of access to GNR, consequence of the SFEC, etc.). The FFB will also campaign for all-out simplification to improve fluidity and remove blockages in new construction, first by effectively generalizing the dematerialization of the filing and examination of permits, but also by seriously studying the track of the declaratory permit or by supervising the dilatory processes of pre-examination of the permits, etc.
It will also be necessary to address the ecological and digital transition, to properly measure what it implies in terms of transformation of the sector in terms of markets, employment, training, business structures and organization of the sector at the 2050 horizon.
This Assizes therefore constitutes a project at the start of the five-year term. It should make it possible to better respond to the immediate threats that weigh on the building industry, but also, in a world that is experiencing major upheavals, to prepare the future of the sector at the service of our fellow citizens and our economy. Extensive and exciting program!