The construction sector is still not out of the crisis

While new home sales are up, demand for building permits remains down (-7.9%). The sector lost 44,600 jobs in the first six months of 2015.

The descent into the hell of the building started in 2008, seems decidedly endless. The first half was a black time for the sector. Building permit applications filed between January and July are down -7.9% from the same period of 2014, as are housing starts, down to -5.8%, according to figures released on Friday. September 18 by the French Federation of Building (FFB). At this rate, the year should end with a balance sheet of 334,000 homes built, against 355,000 in 2014. The trend is just as bad (-12% of authorized space) for the construction of offices, shops, administrative buildings and industrial. Public investment, especially local authorities, which alone account for 45% of the activity in public works, is also at half-mast.

Another disappointment comes from the maintenance and building improvement sector, which professionals counted on. Despite dopants – a zero-interest eco-loan, a tax credit, a 5.5% VAT – that the government set up in the fall of 2014, it does not take off. “The sites are too complex and the return on investment is too long to convince individuals to engage in such work,” says Jacques Chanut, president of the FFB. The owners of a house do not really start their renovation unless the project allows an expansion and a real improvement of comfort, the only saving of energy does not seem to be enough to motivate it.

The job hemorrhage continues, with 44,600 lost in the first six months of 2015, “the worst score since the Great Recession of 2008,” laments Mr. Chanut, “which brings to 106,000 their total number since seven years, maybe 150,000 by the end of this year, ” he feared. Business failures are on the upswing, rising by 2.4% in the first half of 2015 and affecting mainly (+ 10%) craftsmen and businesses with one to three employees. This weak construction alone costs 0.2 points of growth each year since 2008.

“The delays drag on”

But entrepreneurs want to believe in better prospects than encourage some indicators. The number of new home construction contracts, for example, jumped in June, July, and August by 24%, at an average price of 110,000 euros, down 1.5% year-on-year. “This improvement is clearly due to the expansion of the zero-rate loan decreed October 1, 2014, rejoices Patrick Vandromme, president of the Union of French Houses which federates the builders of individual houses. But this does not translate into building permits, which are getting longer and longer since we are almost two hundred days between the signing of the contract and the start of the construction project, “he regrets.

New home sales by developers are also up by 20% in the first half of 2015. But here too, the delays drag on between the booking by the client and the start of the works, scheduled for the beginning of the year. 2016. “There are other encouraging signs: the material traders are facing a strong demand, like the bankers in matters of real estate credit or financial guarantee to grant to the manufacturers, explains Jacques Chanut. But the cash of our companies is bloodless, and it will help them to find funds to revive the sites and buy equipment. ”

The FFB is asking the government for new support measures to stimulate the first-time homeownership, and to extend, for one year only, the energy tax credit to second homes, a ” punch operation ” to trigger energy renovation projects, ” Chanut suggests.