The HCOB Construction PMI in France stood at 43.6 in April 2025, barely changed from March’s 43.8, reinforcing signs of entrenched weakness across the French construction sector and extending the current contractionary streak to nearly three full years.
French construction sector mired in contraction
The reading remained deeply below the neutral 50.0 mark, highlighting a sustained lack of momentum and the broader stagnation facing the industry amid sluggish economic conditions and elevated borrowing costs. Persistent challenges in securing new business continued to weigh heavily on firms, with overall order books thinning further and activity slowing across all major segments.
While declines were still recorded in residential, commercial, and civil engineering work, the downturn in residential construction was the shallowest since November 2024, suggesting that housing market conditions may be approaching a tentative bottom. However, this was not sufficient to shift the overall trajectory of the sector. Commercial and public-sector infrastructure projects continued to shrink at a steeper pace, hurt by weak private investment sentiment and a lack of new tenders from municipal authorities amid fiscal constraints.
Firms scale back purchasing activity further
In response to the demand slump, French construction firms scaled back purchasing activity further and trimmed staffing levels to adjust to lower operational requirements. The rate of job shedding accelerated modestly in April, as more firms chose not to replace departing workers or froze hiring plans. Subcontractor usage fell sharply as well, and rates charged by subcontractors declined for the fourth consecutive month, reflecting weakening demand and increasing competition for limited work.
Meanwhile, input cost inflation re-emerged after several months of moderation, driven by higher prices for imported materials and transport, though the overall pace of increase remained far below the historical survey average. This suggests that while cost pressures are not as severe as during the inflationary peaks of 2022–2023, they continue to add strain on already-tight margins.
Confidence increases
Despite the challenging environment, business sentiment showed marginal improvement, with the degree of pessimism regarding the 12-month outlook softening compared to the 2024 average. Some firms cited potential stabilization in the residential housing market and hopes for more accommodative credit conditions in the second half of the year as grounds for cautious optimism. Still, the majority of respondents remained downbeat, citing weak pipelines, prolonged project delays, and uncertainty surrounding the regulatory environment as major headwinds.
Overall, the April data reinforced the view that the French construction sector remains in a protracted downturn, with few signs of near-term recovery unless broader macroeconomic conditions, public investment levels, and credit access begin to improve meaningfully.
