French Construction Sector Continues to Struggle

The S&P Global Construction PMI in France fell to 38.1 in April 2026 from 38.4 in March, extending the prolonged downturn that has gripped the sector since June 2022. The reading signaled the steepest contraction in construction activity since September 2024, as all three monitored segments posted solid declines. New orders fell at the fastest pace since May 2020, underscoring weak underlying demand, attributed to international uncertainty, local elections and uncompetitive pricing. At the same time, employment declined, marking two years of continuous job cuts and the sharpest drop in five months. Although demand pressures eased, supplier performance deteriorated to the greatest extent in three years. Cost pressures intensified as the war in the Middle East led input price inflation to soar. Energy, oil and oil-based prices surged, with a record rise in the underlying index driving inflation to its highest level since November 2022. The business outlook weakened further.

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.