Outlook for French construction sector is "unpromising" amid PMI fall

France's decline in construction activity worsened in July as the volume of new work shrank at the sharpest pace in several years, purchasing manager's index survey results from S&P Global showed on Wednesday.

The France construction purchasing managers' total activity index fell to 39.7 points in July from 41.6 in June. Falling more than 10 points below the neutral 50-point mark separating growth from contraction, it indicates the pace of decline was rapid in July.

Volumes of income new work fell at the sharpest pace since November 2020, S&P Global highlighted. Purchases of construction materials declined to the most substantial degree in over a decade, when excluding months affected by the Covid pandemic.

Companies made cuts in employment during July, extending the period of declining construction workforce numbers to 15 months, with job shedding the worst since May 2020.

Norman Liebke, economist at Hamburg Commercial Bank said: "The outlook for the French construction sector remains unpromising. The employment situation keeps worsening while new orders are plummeting further. French constructors are also expecting weaker activity in the coming twelve months as they anticipate weak demand."

The PMI features a panel of 150 construction companies in France, with responses collected between July 10 and 31.