“The momentum in both the private and public civil engineering sectors seems to be holding up. This slow pace should continue in 2024 and 2025.”
Residential
The new construction market is going through a major crisis. With high inflation and steadily rising interest rates driving down household purchasing power, demand for housing has been weakened.
Given this context, our previsions indicate that the French overall productivity of housing will decrease in 2023 by -4.4% due essentially to the decrease of new construction of -11.6% against the +1.8% increase in the renovation sector. The number of started dwellings is expected to be 311,700 units in 2023, followed by 288,400 starts in 2024, 300,900 in 2025, and 307,200 in 2026.
Non residential
Over the first nine months of 2022, building permits are down by almost 4% compared with 2021. Over the same period, housing starts are down by 17%. This decoupling between building permits and housing starts can be seen in many of the segments detailed in this report.
In terms of production, this poor outlook will also be felt (-7.3% compared to 2021). As a result of the poor performance of housing starts in 2023, and the weak rebound expected in 2024, output should also fall in 2024 (-2.7%) before rising slightly in 2025 (1.3%).
Civil Engineering
Although also affected by the uncertain macroeconomic context, investment in public works is not expected to decline this year compared with last. In fact, the momentum in both the private and public sectors seems to be holding up, even allowing for a slight increase in output (1%) in 2023 compared with 2022. This slow pace should continue in 2024 and 2025.
