French Construction Faces Sustained Slump

The HCOB Construction PMI in France fell further to 38.4 in March 2026 from 43.9 in February, pointing to the steepest contraction in the construction sector in 18 months. All three of the broad construction activity types, including home building, commercial projects, and civil engineering, experienced sharper reductions. New projects declined further, extending the current period of falling new business to four years. Firms responded by sharply cutting purchasing volumes and scaling back employment. Suppliers' delivery times lengthened, and to a slightly greater extent than in February. On the price front, input cost inflation surged, approaching a three-year high, amid reports of higher prices for fuel, chemicals and plastics. This reflected the immediate impact of the energy price shock triggered by the Middle East conflict. Subcontractors raised their fees to the greatest extent since October 2023. Business confidence fell sharply, wiping out much of February’s improvement.

The HCOB Construction PMI in France edged up to 43.9 in February 2026 from 43.5 in January, showing the construction sector was still contracting, but at its slowest pace in six months. Downturns in commercial and residential building moderated, partially offsetting the sharper drop in civil engineering. Meanwhile, new orders fell further and at a solid pace, amid slow market conditions and generally subdued demand. This led to further reductions in material purchases and employment. On the price front, input price inflation cooled to its softest in three months and was well below the average of the survey. Looking ahead, confidence in the outlook improved markedly in February, supported by optimistic sales expectations and healthier project pipelines.

The HCOB Construction PMI in France came in at 43.5 in January 2026, broadly unchanged from December and November. The data signaled another sharp contraction in construction sector activity, extending the severe downturn that began in June 2022. Weak conditions persisted across all monitored segments, namely residential, commercial, and civil engineering, amid ongoing subdued demand. New orders fell significantly, though less than in December, prompting constructors to scale back material purchases; the reduction, however, was the softest since May 2024. Subcontractor usage declined at a markedly faster pace than in December. Supplier delivery times lengthened for the eighth consecutive month, though delays were moderate and the weakest since July. Employment levels continued to fall, but job losses eased for a second month and were only marginal overall. Looking ahead, expectations remained bleak, with firms forecasting a further decline in activity over the next 12 months.