Sentiment among French construction companies deteriorated in April following a negative March, according to a report by l'Institut National de la Statistique et des Études Économiques (Insee). The firms surveyed reported a stable but negative business climate, with companies active in both structural works and finishings expressing a pessimistic attitude towards their future and past activity, as "the business climate in building construction has darkened.
"Last month, construction companies' order books deteriorated again, falling back below the long-term average. Given their staff size, the firms surveyed reported eight months of work. Production capacity was stable on-month, while 44% of firms reported slowing output because of supply difficulties. Slightly more business managers than in the previous month were facing obstacles that limited their production capacity, with about 19% of construction firms considering themselves unable to increase production in case of additional orders due to a lack of personnel and supply difficulties. Around 33% of companies reported "insufficient" demand, according to Insee.
The situation for steel consumption downstream is described as "completely catastrophic [in France], as it is in Germany. We see a challenging year ahead. The main concern today revolves around tight margins. In 2024, we will not manage to make a profit," a French purchasing group source told Kallanish. Some long steel mills are asking for an average of €20/tonne ($21) on-month increases, but have so far been unsuccessful in obtaining higher prices, except for very low tonnages. Contract values for long products remain mostly stable compared to April.
Volumes shipped from distributors in March were reported to be low compared to the same period last year, while April volumes slightly improved. May is considered "quiet" amid back-to-back sales. The distribution sector is said to have purchased between 20-25% less in the first quarter compared to last year, and a similar trend is likely in the second quarter.
