The building materials market continues to recover in the fourth quarter of 2020

Thus, after a fall in activity of -17% over the first six months of 2020 (CJO), the materials indicator regained + 4,5% from July to December but the year ended with a decline of nearly 7% (provisional data). The latest indicators suggest that, on the building side, activity remains supported by order books that are still fuller while, on the public works side, even if calls for tenders, especially from public customers, are still slow to wake up, the outlook recover slowly; a context that could fuel demand for materials at least in the first months of 2021.

The rebound does not erase the dive

According to the provisional results of the monthly survey in December, activity in the aggregates and ready-mixed concrete sector contracted compared to November, a rather dynamic month, but is up compared to last year. Thus, aggregate production, down -4,5% in November, is + 1,2% higher than in December 2019 (CVS-CJO data). During the last quarter, the aggregates activity stabilized at its level of the third quarter but still shows an increase of + 1,3% compared to the fourth quarter of 2019. Thus, after the fall of -16,3% in the first half, the aggregates business recovered by + 2,6% in the second. Over the year 2020, the contraction in volumes produced in aggregates is approaching -7%. As for the ready-mixed concrete, deliveries fell by -5,1% compared to November but are + 4% above their level of December 2019. During the last three months, activity has certainly lost -2,4, 3,8% compared to the third quarter but is still up + 5% compared to the last quarter of last year. The second half therefore describes a rebound of + 22,8% after the plunge of -9% observed in the first. In total over the year, ready-mixed concrete volumes thus recorded a drop of more than + XNUMX%.

The materials indicator confirms this contrasting profile. After the collapse over the first six months of 2020 (-17% over one year, CJO data), the rebound that began in the third quarter (+ 7,3%) continued in the fourth with much less magnitude, however ( + 1,7%). The activity of the basket of materials making up the indicator could finally contract by -6,7% in 2020.

Resilience of building trust

In January 2021, according to INSEE, the opinion of building contractors on their activity for the next three months improved again after the sharp rebound observed in December. Although the balance of opinion on very recent activity has deteriorated a little, building professionals remain very optimistic on the level of their order books, which show more than 9 months of activity reserve in the wholesale sector. work, ie a level unchanged on average since October. However, the latest construction data is hardly reassuring. In 2020, the number of housing permits is down by 65 units (i.e. -800% for 14,7 authorizations), while housing starts contract by -381% (or 600 units less than in 6,9 for 28 units in total). In both cases, the collective segment appears to be more impacted than that of the individual, particularly in the diffuse sector where permits increased by + 200% over one year in the last quarter. If, overall, the figures for the fourth quarter reflect the continued upturn in permits (+ 2019% compared to the third quarter, CVS-CJO), those for the month of December are very disappointing with a further drop in authorizations, however in recovery. continuous since July. As for housing starts, they also fell between the third and fourth quarters (- 376%).

A rather encouraging signal is however seen on the side of real estate development. In fact, in the quarterly survey of January 2021 conducted by INSEE, the opinion of developers on the demand for new housing is improving and they are more likely than in October to predict housing starts over the next few months. This rebound concerns both homes intended for sale and those intended for rental. After a tightening in 2020, the constraints weighing on the granting of bank loans were relaxed at the beginning of January by the High Council for Financial Security - HCSF, thus probably offering eligibility margins to households hitherto excluded from the market. by the criteria of solvency.

Finally, with regard to business premises, the situation is much bleaker: the decline continues over the months both for authorized surfaces (-14,5% in the fourth quarter, or -19,2% in the year 2020) than for areas started (-11,9% and -16,3% respectively). The non-residential market seems to be permanently impacted due to the wait-and-see attitude of clients, both public and private, and the FFB is now counting for 2021 on areas started 30% below their long-term average level (i.e. 16,8, 24 million m² against an average of XNUMX million).

TP: very small thinning

In January 2021, the opinion of public works contractors on their business outlook for the next three months improved slightly, particularly with regard to private project management, even if it remained below its average of long period. While companies are seeing a certain deceleration in their recent activity, they nevertheless note a slight tremor in their order books, which are still considered poorly filled to date. The revival of activity remains conditioned by the return of calls for tenders from local authorities, in particular from the municipal block, which represents nearly 40% of the contracting authority for public works. The FNTP thus underlines the urgency of supporting infrastructure investment. Indeed, according to work carried out by the OFCE *, the sharp drop in public investment in the first half of 2020 (-26%) could result in a depreciation of existing assets. In such a context, the rapid implementation of the Recovery Plan seems just as essential to save activity and employment as to preserve the quality of service and the security requirements of the current assets and networks. Local authorities are thus essential players in ensuring the territorialization of this relaunch, but for the time being, projects are long overdue.