4th September 2025

Key Findings:

Headline index rises sharply but remains below 50.0
Civil engineering activity growth offset by sustained downturns elsewhere
French constructors foresee further challenges in the year ahead

France’s construction sector continued to deteriorate midway through the third quarter. Commercial and, in particular, residential building activity remained in contraction, offsetting a fresh rise in civil engineering work. That said, the overall rate of reduction in construction activity eased amid a softer decline in new orders. Cost-cutting remained a prominent theme, however, with employment and purchasing volumes decreasing markedly. Survey respondents also looked to the next 12 months with pessimism.

The headline HCOB France Construction PMI® Total Activity Index — remained in sub-50.0 contraction territory during August, indicating another monthly fall in the total volume of work carried out by firms in the construction industry. At 46.7, the headline index extended a run of continuous decline that began in mid-2022. However, the August figure was up sharply from July’s ten-month low of 39.7, signalling a marked easing of the downturn.

Of the three broad categories of construction activity monitored by the survey, the latest data indicated further considerable weakness in the residential segment. Although the decline in home building was the softest since April 2023, it was still sharp and acted as the main drag on the wider construction sector.

Meanwhile, after falling in July at the steepest rate in over five years, August saw a noticeably slower reduction in commercial construction activity across France. On the other hand, civil engineering was an area of strength, with activity here rising for the second time in the past three months. Growth was only moderate, however, and more than offset by weakness in the other two categories.

Demand for construction projects across France worsened further in August. This extended the current period of falling new orders to almost three-and-a-half years. That said, the rate of decline did slow on the month and was its softest since April.

The Exporting from the UK section of the Construct UK Directory includes
– International Construction Exhibitions – UK Government Support for Exhibiting Overseas – Identifying Suitable Markets – Agent or Distributor – International Project Lead Sources

The 12-month outlook for construction activity remained bleak, with surveyed companies anticipating work levels to be lower in a year’s time. Pessimists (29%) outweighed optimists (15%) almost two-to-one.

Cost-cutting measures were signalled by the sub-indices from the HCOB PMI survey. For instance, quantities of construction materials purchased decreased at a sharp rate, while there was a further (and slightly quicker) reduction in workforce capacity. In fact, the rate of job shedding posted in August was the most marked since May 2020.

Despite French constructors trimming buying activity, supplier delivery delays intensified in August. Average input lead times lengthened to the greatest extent in a year-and-a-half.

Meanwhile, the latest survey data indicated that operating expenses at French builders were higher than in July. Average costs have risen on a monthly basis since April. That said, the rate of inflation eased to a four-month low.

Commenting on the PMI data, Norman Liebke, Economist at Hamburg Commercial Bank, said, “The French construction sector moved towards stabilisation in August, with the overall activity index rising by seven points to its highest level since January 2023. Although activity continued to contract, the pace of decline eased notably, driven in part by slower reductions in both housing and commercial construction. Civil engineering stood out, registering growth and marked its third expansion this year following January and June.

“A softer fall in new orders supported the improvement in the Total Activity Index, which signalled a significantly slower rate of decline compared to July. This suggests a potential shift in demand dynamics, though it remains to be seen whether the trend is sustainable or merely temporary. The moderation in the order book contraction could provide some relief to constructors, but underlying uncertainty persists.

“Labour market conditions remained weak, with employment continuing to fall. This reflects ongoing caution among firms, who remain unconvinced about the durability of recent improvements. Future expectations also stayed subdued, with pessimism still dominating sentiment across the sector, indicating that confidence has yet to recover meaningfully.”

For further details, click here.