The construction confidence indicator in France had seen a slow but steady decline from January’s figure of -6.2 to May 2024’s -8.9; however, now shows signs of improvement with its latest figure of -7.8 reported for June.

This earlier decline was mainly driven by worsening current overall order books, from -17.6 to -22.6, and a more minor but complimentary movement in employment expectations from 5.2 to 4.8 between January and May. Employment expectations over the next three months continued this trend in June, worsening slightly to 4.6; however, a larger positive movement in the evolution of current overall order books from -22.6 to -20.2 was the main driving factor in the improvement of the overall construction confidence indicator.

Insufficient demand, although improving slightly, remains stubbornly high at 32.8, presenting a significant hurdle for the industry, while high labour shortage figures also persist at 34.3, further complicating the outlook. Continued monitoring and strategic adaptation will be essential for navigating these challenges and sustaining growth in the French construction market.

Furthermore, the construction sector in France faces evolving regulatory pressures aimed at enhancing environmental sustainability and safety standards. Compliance with these regulations adds complexity and cost to projects, influencing both investor confidence and operational efficiency. Moreover, the upcoming legislative election in France is creating uncertainty across various sectors, including construction. Stakeholders are cautious amid anticipation of potential shifts in legislative priorities and policies post-election.

Gleeds recommends revising previously set project budgets to present-day figures based on local statistical information, our own internal data and forecasts. Additionally, we advise investors to consider inflation contingencies in their budgets as materials and labour shortages remain unpredictable.