French construction output rebounds sharply in Q3, says GlobalData

Following the release of data from the French National Institute of Statistics and Economic Studies (INSEE) showing a strong quarter-on-quarter rebound in construction output in the third quarter of 2020;

Moustafa Ali, Economist at GlobalData, a leading data and analytics company, offers his view:

“Despite this strong Q3 growth, GlobalData maintains its forecasts that construction output will contract by 11.6% in France in 2020 as a whole. While conditions in the country’s construction sector have significantly improved – with a 35.5% quarter-on-quarter rebound in Q3 – the large spike in COVID-19 cases during the past month has led the French Government to announce a four-week lockdown for the entire country. Although construction sites have been exempted from the lockdown measures, sites may be forced to close if cases continue to rise – resulting in a weaker outturn in Q4 than currently anticipated.

“On a year-on-year basis, construction output in France was still down in Q3 2020, contracting by 4.8%, according to INSEE, and resulting in a cumulative decline of around 15% in the first three quarters of the year. Construction was among the fastest-growing sectors in Q3, with works resuming following the suspension in the previous two quarters.

“While construction sites will be allowed to remain open, the restrictions are set to hit the wider economy – with INSEE now expecting a contraction in Q4. The lockdown measures, coupled with a weaker economic outlook, will weigh on investments in the construction sector.”

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