Impacted by successive crises over the past 2 years, the building sector is asking for increased support from the sector

In a context of materials crisis and war in Ukraine, the upcoming presidential election should make it possible to deal with the issue of regional planning and construction in general by integrating the issues of the living environment, housing and mobilities.

The FFB notes in particular that sales of single-family homes dropped 15% year-on-year over the December 2021-February 2022 cumulative total. A decline in building activity will follow in the coming months. This observation most certainly results from the backlash of the anticipation of the RE2020, which came into force on January 1, 2022, perhaps also from the regulations of the High Council for Financial Stability on mortgages.

Added to this are also the first effects of “Zero net artificialisation” (ZAN), with some local authorities translating the objective into an immediate halt to all construction. It must be said that the hyper-technical nature of the exchanges around the very definition of artificialization encourages shortcuts, certainly sometimes abusive, but at least understandable. In fact, how to explain that the vegetable garden adjoining the house of everyone is an artificial surface while the field of full cultivation on the other side of the road is not? We can also fear that the legislator does not find his way there either, he who had put forward his clear intention to exclude from artificialized spaces parks, gardens of individual houses or green spaces near residential buildings. , because they are often a source of great biodiversity.

While the implementation of the ZAN based on the new clear definition of soil artificialization will take place in 2031, the FFB asks that we take the time for a calm debate to lead to an operational mechanism because understandable by all. Conversely, haste leads irremediably to an inapplicable and questionable system, which must be avoided at all costs.

The economic situation at the end of March 2022

In 2021, over two years, housing starts will almost stabilize, at 390.000 units. More recently, on a two-yearly basis over three months at the end of February 2022, the situation is deteriorating on the housing starts side (-3,9%) but remains well oriented on the permit side (+6,8%) thanks to the individual (+28,9 .2020%), a consequence of the influx of permit applications before the entry into force of RE1 on 2022 January 15. However, the counterpart of this movement can already be seen in the collapse of sales of nearly 2021% cumulatively from December 2022 to February XNUMX compared to the same period two years earlier.

The surface areas of new non-residential buildings started fall by 11,8% between 2019 and 2021, to fall to 25,1 million m², a level nearly 7 million below the long-term average. Over the recent period, in two-year shift over three months at the end of February 2022, the surfaces started and authorized still drop by 3,8% and 11,9%. Only industrial and similar buildings, as well as shops are doing well, with rising levels.

As for the improvement-maintenance activity, it fell by 2,5% between 2019 and 2021. Energy renovation continues to drive this market, however, to +1,0%, and more particularly in housing, to +3,9, XNUMX%.

Overall, the building activity drops 4,9% in volume between 2019 and 2021, i.e. a development very close to our December 2020 forecast (-5,6%).

Paradoxically, over the same period, employment increased by 55.700 units, despite the destruction of 6.500 full-time equivalent jobs in the interim. The gap between changes in activity and employment therefore remains highly topical and can be explained to a large extent at least by order books that are still full.

In addition, operating margins continued to deteriorate in construction between the third and fourth quarters of 2021. The same applies to craftsmen's cash positions, while they remained stable for more than ten employees, after the drop in the 'fall. However, the supply problems are increasing and the prices of materials are soaring again since the outbreak of the war in Ukraine, even though the building sector has to cope with a substantial increase in wages, due to an acceleration inflation and still significant recruitment difficulties. Without enhanced sector solidarity, the financial situation of companies therefore runs the risk of rapidly weakening.

A recent hardening linked to the war in Ukraine

The rebound that followed the first confinements was struggling to turn into a real recovery, the outbreak of the war in Ukraine upset the landscape and undoubtedly broke the dynamic. The first announcements of shortages among suppliers, not really confirmed since, were quickly followed by dizzying and sometimes repeated price increases. In one month, the members of the FBB regularly collect announced double-digit increases. And almost all materials are concerned, either because their production requires a lot of energy, a factor whose prices experience erratic variations around a clearly upward trend, or because they themselves depend on raw materials. or semi-finished products penalized by the war.

The FFB has been calling for the solidarity of the sector for more than a year so that a real sharing of the additional costs is put in place. The movement proved too timid last year and resulted in a 5,4% increase in building costs over one year at the end of December 2021, all markets and all sizes of companies combined, according to the BT01 index. That's twice as much as general inflation. This sharing is becoming totally indispensable today. Failing this, the surge will prove to be such that many of the players in the real estate and construction sector will no longer be able to honor the contracts signed or seek new markets which they know will end up at a loss. Craftsmen and construction companies absolutely need suppliers who give a little visibility and take their share of the effort, on the one hand. On the other hand, in a world that is once again becoming inflationary, they also need customers who, right to the end of the chain, reinstate price variation clauses in all markets.

Finally, the FFB is also asking the government for stronger support for the sector. The construction industry has been integrated into the “Resilience Plan”, which provides a framework for action; on the other hand, the building box largely remains to be completed. In the immediate future, this involves two strong, but transitional measures: the freezing of late payment penalties until the end of the chain on all markets and the full support of partial activity. These are essential measures to allow a return to a little serenity. In addition, to support craftsmen and businesses in the storm, the FFB reiterates its request for the immediate payment of carry back receivables or any other cash assistance that does not go through credit, already largely mobilized with the PGE.

A ministry for the sector

This context reshuffles the cards of the presidential campaign.

This is why the key players in the sector wish to draw the attention of candidates for the presidential election to the need to make housing policy, renovation and new construction a priority for strategic action. for the coming years.

Indeed, the findings have now been made and the issues are clear for:

• to allow our fellow citizens, in particular the poorest among them, to find accommodation in the best conditions of comfort, safety and health. Housing, the main item of household expenditure, must be a tool in favor of purchasing power;
• respond positively to the priority issues of the ecological transition which cannot be achieved without a strong strategy in partnership with all the players in the sector. Construction and renovation, in particular energy and environmental, must be central tools in the fight against global warming;
• recognize and support the dynamics of a strategic industry that contributes to the common good of the nation, economically, industrially and socially with the creation of tens of thousands of non-relocatable jobs in all territories;
• ensure the consistency and readability of regulations, promote sustainable employment and fight against fraud

These challenges require a strong measure to include in the long term a real strategy on construction, renovation, the fight against the territorial divide, the concrete implementation of urban renewal projects such as the revitalization of city centers and towns, as well as the land use planning. This approach must be developed in close consultation with all the players in the sector, to meet all the needs and the changes underway, such as the employment-housing link, for example.

This is the reason why the players in the construction-real estate sector are asking the candidates for the presidential election to create, for the next five-year term, a fully-fledged ministry dedicated to "sustainable construction and development of the territory”.

Such a ministry would bring together the current Ministry of Housing, Urban Affairs and Territorial Cohesion to develop an overall vision and strategy in the field of construction, housing, mobility, infrastructure and land use planning.

The actors of the construction-real estate sector, signatories of this commitment, represent a:

• first-rate economic strike force with several hundreds of billions of euros in annual turnover throughout the national territory, generated by hundreds of thousands of companies of all sizes;
• industry of excellence with around 4 million jobs in France, a guarantee of the nation's social cohesion.

It is indeed together that activity and jobs can be maintained and developed by the sector, which works daily to maintain economic activity, preserve biodiversity, develop the circular economy, skills, social cohesion and the attractiveness of territories in France.