French Construction Sector Weakens Further

The S&P Global France Construction PMI rose to 41.5 in July 2026 from 38.2 in June, marking its highest level since February. Despite the improvement, the index remained well below the 50 threshold, signaling a continued sector-wide downturn. Commercial construction was once again the weakest segment, posting a steeper decline than both residential and civil engineering activity. New orders continued to fall at a rapid pace as firms cited weak client demand, customer hesitancy, and a lack of competitiveness. Construction companies also continued to reduce staffing levels, extending a run of job cuts that has persisted since May 2024. On the cost side, input price inflation remained elevated and significantly above the rates seen throughout 2025. Looking ahead, French builders remained pessimistic about activity over the next twelve months. While sentiment improved slightly from the previous four months, the level of confidence remained deeply negative by historical standards.

The S&P Global France Construction PMI fell to 38.2 in June 2026 from 39.6 in May, signaling a faster contraction in construction activity. The downturn remained broad-based, led by the commercial sector, where activity declined at the steepest pace since May 2020. Housing construction also contracted more sharply, while civil engineering posted its softest decline since January. Meanwhile, new orders continued to fall sharply, extending more than four years of declining demand amid weak client interest and intense competition. Firms also reduced employment and purchasing activity as they adjusted to lower workloads. Although input cost inflation eased to a three-month low, it remained well above levels seen before the Middle East conflict. Business confidence also weakened as firms grew more pessimistic about the year-ahead outlook amid competitive pressures and the broader economic environment.

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.