The construction materials market slowed by the global context

Rising global tariff tensions, coupled with announcements of a European rearmament plan, have revived uncertainty in the financial markets (driving up long-term rates), but also among banks (slightly less inclined to pass on the fall in short-term rates and to lend) and households (less confident in the future and more reluctant to invest in housing). Despite this less favorable context, the rise in the sector's indicators continues, including in construction materials... but with less vigor. While the conditions for a continuation of this movement remain generally present for the time being (calmed-down interest rates, support measures for first-time buyers, significant housing needs, etc.), vigilance and caution remain required in the second half of the year in the face of the economic repercussions of more numerous factors of instability: customs tensions, geopolitical risks (conflict in the Middle East with the Israeli-Iranian conflagration) and even new threats of censure of the government at the start of the school year, with the vote on the 2026 budget.

Key figures

From January to April, aggregates activity recorded a +2% increase over one year while that of ready-mixed concrete fell by a further -4,4%.

April is marking time

After a rather encouraging March, initial estimates for April are more mixed. For example, in the aggregates sector, activity fell by -5,2% compared to March and by -3,2% compared to April 2024 (CVS-CJO data). Over the last three months (from February to April), aggregates production showed a slight decrease of -1,4% compared to the previous three months but remains up compared to the same period a year ago (+0,6%). The recovery in aggregates activity continues, however, since, cumulatively over the first four months of the year, it is up +1,5% year-on-year, while the rolling cumulative figure over twelve months now stands at -1,4% at the end of April (compared to -4,1% at the end of December 2024). For ready-to-work (BPE), the trend reversal is later and more gradual. In April, deliveries also fell, by -1,4% compared to March and by -6,5% compared to April 2024 (CVSCJO data). Over the last three known months (February to April), ready-mixed concrete activity fell again by -3,2% compared to the previous three months and by -5,3% compared to the same quarter a year ago. Ready-mixed concrete production therefore continues to decline, albeit at a more moderate pace, but the low point of activity has still not been reached! From January to April, cumulative volumes still show a contraction of -4,4% over one year, while over twelve rolling months, the decline returns to -8,3% (compared to -11,2% at the end of December 2024).

The UNICEM materials indicator shows relatively good activity in the mineral sector in March: at 82,9, the index increased by +1,8% compared to February and by +1,1% year-on-year (CVS-CJO data). However, in the first quarter, volume activity declined again compared to the previous quarter (-3,6%), confirming the slowdown in the dynamics at the end of 2024, even if, over one year, the decline continues to moderate (-1%). Some materials, such as aggregates, tiles and bricks and concrete products even returned this quarter to slightly positive trends. In cumulative terms over twelve rolling months, the decline in materials activity came to -4,1% at the end of March (compared to -6,8% at the end of December).

New housing: headwinds...

Economic signals appear mixed in the housing sector. Some are rather encouraging, while others call for greater caution. Thus, the latest survey conducted by INSEE among construction professionals shows that the business climate brightened significantly in May, with the composite indicator returning above its long-term average, partly thanks to the expected rebound in activity in housing and structural work. Similarly, despite order books that have changed little (fluctuating between 8,5 and 8,9 months over the past year), the assessment of their level continues to recover, although it is still below its long-term average. Quite logically, entrepreneurs' opinions on future employment are in fact better oriented. On the construction side, housing starts increased by +5,2% year-on-year over the last three months (February to April), leaving the cumulative twelve-month increase of +2,2%, to 291.000 units, with the individual grouped and collective segments being the most vigorous. As for business premises, their trend remains downward, with a decline of -10,1% over the last three months and -8% over twelve months (with 19,9 million m²), a trend that is not very consistent with the level and past evolution of permits. The latter also continue to increase, by +3,3% year-on-year over the last three months and +2,3% cumulatively over twelve months, driven by permits in the commercial, agricultural, industrial and warehouse segments.

The dynamics of permit applications also remains well underway in the housing sector, with a rebound in permit applications of +15,9% over the last three months, with all segments showing increases, including pure individual housing (+6,6%). Cumulatively over a rolling twelve months, the overall trend remains negative (-4,9% for 341.800 permits), but certain segments, such as grouped individual housing and residential housing, are returning to positive variations (+2,6% and +9,9% respectively). These findings echo recent developments in the real estate market, particularly that of single-family homes, which are regaining some color after two dark years. Thus, in April, sales showed rare vigor, according to the latest publication from Markemétron. After an already very dynamic March, the market rebounded by +44,7% year-on-year in April, bringing the growth of the last three months to a rate of +33,1% and the rolling annual level to a trend of +9,5% (56.000 sales). In this context, sales for the year 2025 could now be around 65.000 units, a level certainly well above that of 2023 (58.500) but which remains almost half lower than the long-term average activity (120.000 sales).

The solid performance of the individual housing market is also continuing on the developers' side. Indeed, while reservations for new homes continued to struggle in the first quarter, falling by -7,9% compared to the fourth quarter (CVS-CJO data) and by -3,3% year-on-year, those for houses increased by +9,4% over the quarter (+11,5% year-on-year). The apartment market is still struggling to recover, but developers' supply is slowly reviving, with sales up +4,7% this quarter (+2,9% year-on-year), which suggests that developers are anticipating a strengthening of demand after several years of deep lethargy. Driven for over a year by falling interest rates and more aggressive banking supply, housing demand could now face new challenges. Concerned by a more fragile economic and budgetary situation, households are indeed showing more reluctance to invest, even though the new zero-interest loan improves their solvency. At the same time, rising geopolitical uncertainties have put an end to the decline in housing loan rates, which began to "rise" in May (+3 basis points to 3,11%) in a context of still-tight new property prices. These are situations to be closely monitored in the coming months...

TP: the upcoming braking

With the next municipal elections looming in less than a year, public works activity is continuing its positive trajectory without, however, showing any acceleration, as might have been the case at this stage of the electoral cycle.

electoral. According to the FNTP, the volume of work carried out in April, although stable compared to March (+0,3%), increased by +5% year-on-year, leaving the cumulative figure since January at +2,5% year-on-year growth (CVS-CJO data). However, the dynamics of order intake is slowing (-8,1% year-on-year for the first four months of the year) suggesting a slowdown in activity in the long term, which could occur in late 2025 or early 2026, in a climate of budgetary consolidation reinforced by slowing economic growth.

Illustrative image of the article via Depositphotos.com.