in construction, prices remain high and caution, in order
Since then, the situation has changed little but the basic trends seem to be asserting themselves. The institute has just unveiled its indices of production costs in the construction industry for the 4th quarter of 2022, which increased timidly by 0.2% compared to the 3rd quarter of 2022. In detail, this slowdown can be seen in certain business segments , such as specialized construction work (+0.8% after +1.8%) or building construction (+0.2% after +1.5%).
Lower material costs
The fall in the cost of construction materials (-2% after +1.6%), generated by the fall in the price of the steel products needed for their manufacture, is the main explanation. There is also talk of a fall in production costs in civil engineering (-2.6% after -0.3%), a consequence here too of the decline in the cost of materials for infrastructure (-6.4% after – 4.5%), and particularly bitumen prices.
By establishing a comparison over one year, INSEE further confirms the decline in production costs in the construction industry: these increased by 7.7% in the 4th quarter of 2022 after having climbed by 9.3% in the 4th quarter of 2021. This deceleration can be observed in many other business segments and over the same period of time: civil engineering recorded +8.0% after +14.3%, building construction +7.8% after + 8.9%, and specialized construction work +7.5% after +8.2%.
Lack of arms
In other words, if inflation obviously still impacts craftsmen and construction companies, it is nevertheless in the process of settling. In the meantime, the situation is inexorably affecting the business climate between professionals. Construction business leaders interviewed by INSEE in March 2023 speak of a further deterioration in their activity. If they have a positive view of their past projects (+6%), they are however more pessimistic for those to come (+2%).
The institute also notes that the leaders surveyed are less likely than before to consider their order books as above normal (-8% in March after -7% in February). “Given their workforce, building contractors estimate that their order books provide them with 8.5 months of work, a declining duration and the lowest since March 2021 but which nevertheless remains above its long-term average. period (6 months)”emphasizes the INSEE economic note.
In terms of production, two managers out of three claim to encounter difficulties that actually limit their activity. In March, they were 45% to declare facing a shortage of arms – against 49% in February – and 17% to suffer supply problems – against 33% in October 2022. However, one in two companies indicates to be at the limit of its production capacities and could therefore not honor new orders, the first reason given being the lack of staff (for 27% of them).
