4th December 2025

Key Findings:

Broad-based downturn in construction activity, led by residential sector
Employment falls at joint-sharpest rate since May 2020
Constructors’ expectations remain pessimistic

The French construction sector remained rooted in a steep downturn, November HCOB PMI® survey data revealed. Another sharp decrease in activity levels was posted midway through the fourth quarter, reflecting sustained contractions in each of the three broad types of construction work monitored by the survey. In particular, there were further sharp falls in residential and commercial building activity.

Firms continued to retrench, with employment declining at the joint-steepest pace since May 2020 and purchasing volumes trimmed sharply. Cost pressures nevertheless intensified, while business expectations for the coming 12 months remained pessimistic.

The headline HCOB France Construction PMI Total Activity Index — a single measure that tracks changes in total industry activity compared with the previous month — recorded 43.6 in November, thereby posting well below the 50.0 no-change threshold to signal another sharp reduction in total construction activity across France. There was some reprieve, however, as the index rose from October’s weak level of 39.6 to signal the softest decline in three months.

The downturn remained firmly centred on the residential sub-sector, underlying data showed, although the decrease in commercial construction activity was only slightly softer than that seen for housing. In both cases, rates of contraction eased since October. The other type of construction monitored by the survey — civil engineering — also fell in November, although the drop was moderate.

The level of new work received by French construction companies continued to shrink, latest survey data showed, extending the current sequence of falling demand for building projects to over three-and-a-half years. The decrease eased substantially on the month, however, to the slowest since March.

French construction firms reduced their purchases of materials midway through the fourth quarter, stretching the trend of falling buying activity to over two-and-a-half years. Staffing capacity also faced cutbacks in November. The extent to which jobs declined matched that seen in October and was therefore the joint-steepest since May 2020.

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Supplier issues intensified in November, despite an absence of demand pressures across the French construction sector. Average delivery times lengthened to the greatest extent February 2024.

As for costs, the latest survey data signalled a pickup in pressures. The rate of input price inflation accelerated to a ten – month high, but was nevertheless still well below its historical average.

Lastly, French constructors’ assessment of activity prospects in the year ahead remained pessimistic. Cautious client attitudes, concerns about the demand environment and an unfavourable investment climate were stated as reasons to be downbeat by panellists.

Commenting on the PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said, “The HCOB Construction PMI saw a modest uptick in November but signalled subdued conditions still, pointing to a structurally weak market environment. On a positive note, contractions in activity softened across all segments — residential, commercial, and civil engineering — suggesting that underlying conditions may not be as weak as October’s data implied.

“Particularly noteworthy was the sharp rebound in the New Orders Index, following the significant decline in October that took it to its lowest level in over five years. We attribute this primarily to the political uncertainty that dominated the previous month, which temporarily drove up financing costs and led to postponed investment decisions. Nevertheless, the index revival should not be interpreted as a trend reversal.

“The sector’s structural weakness persists, and medium-term prospects remain clouded by considerable uncertainty. This is especially evident in the subcontractor segment, where demand continues to decline, intensifying competitive pressures. To secure contracts, many providers are increasingly resorting to price concessions, adding further margin pressure.

“The outlook for the French construction sector remains muted. The corresponding sentiment index hit its lowest level since 2014 in the previous month, underscoring ongoing weakness. Panellists reported that client demand and low investment appetites weighed on outlook assessments, prompting construction firms to make staff reductions to lower their costs.”

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