French Construction Sector Downturn Eases Slightly

The S&P Global France Construction PMI rose to 39.6 in May 2026 from 38.1 in April, signaling a slight improvement in operating conditions. The pace of decline in construction activity and new orders moderated, while contractions in commercial and residential building eased. Despite the improvement, the index remained well below the 50 threshold. Construction activity stayed among the weakest since the pandemic, led by the sharpest contraction in civil engineering work in nearly five-and-a-half years. Weak demand prompted firms to cut both permanent and temporary jobs, while construction companies continued to reduce purchasing activity. Input cost inflation remained at its second-highest level in three-and-a-half years, driven by higher energy prices linked to the Middle East conflict. Looking ahead, firms remained pessimistic about the next 12 months, citing weak tender activity, intense competition, and subdued demand.

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.