The French Building Federation presents ten measures to stem the emerging crisis and quickly revive the sector

Building activity: the crisis is setting in

The plunge in new housing continues unabated. Year-on-year over five months to the end of May, housing starts fell by another 13,9% and fell at an annual rate to just above 260.000 for the whole of 2024, a level lower than the low point of the crisis. of the 1990s (270.000 housing units). And the movement will amplify, since permits drop 10,7% over the same period, sales of individual houses in diffuse collapse by 29,9% and those of developers fall by 11,4% in year-on-year for the first quarter.

As for new non-residential, it is moderating its decline as it reaches a historic low point at just over 21 million m2 started. In fact, the areas started and authorized are "only" falling by 7,7% and 3,7% over the first five months of 2024 compared to the same period of 2023. It should also be noted that the recovery public procurement was asserted, with in particular a 4,5% increase in the surface area of ​​administrative buildings started over three months at the end of May... before the legislative elections. This will need to be confirmed later.

In the improvement-maintenance segment, the poorly calibrated and too brutal reform of MaPrimeRénov' will leave its mark, despite its rapid revision. As a result, despite the good performance of non-residential, renovation activity only increased by 1,7% in the first quarter of 2024 compared to the first quarter of 2023, excluding the price effect. In addition, the upswings give little hope of catching up in the second.

Quite logically in this context, employment is declining. Between the first quarters of 2023 and 2024, the construction industry lost around 25.000 jobs, including 16.000 employees. And everything suggests that the movement has grown since then.

From one crisis to another: construction penalizes GDP

For the moment, all of these elements unfortunately confirm the FFB's "worst case scenario", i.e. a fall in activity of 21 billion euros in volume between 2022 and 2025, accompanied by the loss of 150.000 jobs in the sector and around 300.000 in the sector.

A voluntary government could, however, avoid this, provided it acts quickly. In fact, after a sharp acceleration in the fourth quarter of 2023, the number of construction company failures has stabilized at a high plateau, at just under 1.200 units per month on average over the first half of 2024, a level close to what we observed in 2016. In the absence of a rapid recovery of the markets, insolvencies will most likely increase again and the sector will no longer have the capacity to respond to a stimulus.

This recovery is all the more important since, as shown in the INSEE quarterly accounts, two aggregates penalize the evolution of GDP in France: investment in construction by households on the one hand, and by non-financial companies the other. In other words, beyond the social risk, without restarting construction, French growth is seriously compromised.

Ten measures to quickly revive the sector

In order to enable a rapid and solid recovery, the FFB has distributed ten proposals to legislative candidates.

The first five concern the market. It's about :

• the reestablishment of a universal Zero Rate Loan (PTZ);
• the reestablishment of a rental investment support system;
• the stabilization of MaPrimeRénov' beyond January 1, 2025;
• the adaptation of the “ZAN” objective to the realities of the territories;
• of stopping the regulatory escalation, including a delay in the upcoming stages of RE2020.

The following three aim to enable fairer competition and make life easier on construction sites. It's about :

• the limitation of cascading subcontracting;
• the revision of the amount of the VAT exemption;
• of the reform of the “REP” system, while the FFB has just obtained a first step forward for January 1, 2025 with the creation of a mapping tool common to the three eco-organizations, the possibility of depositing sorted waste of less of one tonne without prior declaration and that of having sorted waste taken back to the company in containers of 8 m3 or more, with no collection frequency imposed.

Finally, the last two measures ensure favorable social conditions for all businesses and employees. It is therefore appropriate to maintain:

• a learning support policy;
• rules regarding employer representativeness conducive to balanced social dialogue.

Illustrative image of the article via Depositphotos.com.