Construction In France – Key Trends And Opportunities To 2023

The French construction industry registered marginal growth in 2018, with output expanding by 1.1% in real terms – down from 3.5% in 2017. The pace of expansion was hampered by sluggish economic growth, which eased to 1.5% in 2018, compared to 2.3% growth in 2017, owing in part to a hike in fuel taxes and transporter’s strikes. Investor confidence is also being undermined by political risks associated with the ‘yellow vests’ protests. Although the number of protestors at the ‘yellow vests’ rallies in France fell sharply by mid-2019, there are growing concerns over the impact on the economy from the disruption caused by the movement since it began late 2018. The protests were initially established to challenge fuel tax rises, but they escalated into a broader revolt against perceived elitism, with activists blaming the president, Emmanuel Macron.

The pace of growth in the French construction industry is expected to be weak over the forecast period (2019–2023), but there will be some support from investment in housing, transport, energy and tourism infrastructure projects. Moreover, construction work related to the hosting of the Olympic Games in 2024 is expected to support the industry output over the forecast period. The government plans to spend EUR6.8 billion (US$8 billion) to develop infrastructure related to the 2024 Olympic Games.

The government aims to reduce the country’s dependency on coal and nuclear power for electricity generation, in order to reduce risk and carbon emission. The government plans to decrease the share of nuclear energy in the country’s total energy mix from 75% in 2018 to 50% by 2035. To compensate this, the government is focusing on the development of renewable energy infrastructure.

The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 1.44% over the forecast period.

GlobalData’s Construction in France – Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the French construction industry, including –

– The French construction industry's growth prospects by market, project type and construction activity

– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the French construction industry

– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

– GlobalData expects the residential construction market to retain its leading position over the forecast-period and account for 40.9% of the industry’s total value in 2023, driven by rising residential building permits, the low housing loan interest rate and government efforts to balance housing demand and supply through the construction of affordable houses. In April 2019, the government signed an agreement with housing developers to build 110,000 social housing annually and renovate 125,000 houses during the period of 2020–2022.

– Energy and utilities construction market’s forecast-period growth will be driven by the government’s focus on renewable energy. Under the Plan de Programmation Pluriannuelle de l'Energie, the government plans to generate 40% of the country’s total energy mix from renewable sources by 2030. Accordingly, the government plans to install 3GW of wind power plants during 2017–2023, and another 3GW during 2024–2030. The government also plans to install 18.4GW of solar energy power plants and 25GW of hydropower plants by 2023.

– GlobalData expects the infrastructure construction market to record a forecast-period CAGR of 2.64% in nominal terms, driven by the government’s plan to connect major cities of the country with a fast railway network ahead of the 2024 Olympics. Accordingly, under the Grand Express Paris Express project, the government plans to build 200km of new metro lines with a total investment of EUR28.1 billion (US$33 billion) by 2024.

– Forecast-period growth in the institutional construction market will be driven by the government’s focus on development of the healthcare infrastructure. In the 2019 budget, the government increased its spending on healthcare facilities by 2.5%, going from EUR80 billion (US$94.3 billion) in 2018 to EUR82 billion (US$95.4 billion) in 2019. Moreover, in September 2018, the government announced plans to spend EUR4.9 billion (US$5.7 billion) to modernize and digitalize healthcare infrastructure during the period of 2018–2022.

– The total construction project pipeline in France – as tracked by GlobalData, and including all mega projects with a value above US$25 million – stands at EUR338.1 billion (US$398.5 billion). The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards late stage projects, with 56.2% of the pipeline value being in projects in the late stages as of July 2019.

Scope

This report provides a comprehensive analysis of the construction industry in France. It provides –

– Historical (2014–2018) and forecast (2019–2023) valuations of the construction industry in France, featuring details of key growth drivers.

– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

– Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

– Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.

– Assess market growth potential at a micro-level with over 600 time-series data forecasts.

– Understand the latest industry and market trends.

– Formulate and validate strategy using GlobalData's critical and actionable insight.

– Assess business risks, including cost, regulatory and competitive pressures.

– Evaluate competitive risk and success factors.

Table of Contents

Table of Contents

1 Executive Summary

2 Construction Outlook: At-a-glance

3 Latest News and Indicators

4 Key Drivers and Risks

4.1. Economic Performance

4.2. Political Environment

4.3. Demographics

4.4. Risk Profile

5 Construction Outlook

5.1. All Construction

5.1.1. Outlook

5.1.2. Project analytics

5.2. Commercial Construction

5.2.1. Outlook

5.2.2. Project analytics

5.3. Industrial Construction

5.3.1. Outlook

5.3.2. Project analytics

5.4. Infrastructure Construction

5.4.1. Outlook

5.4.2. Project analytics

5.5. Energy and Utilities Construction

5.5.1. Outlook

5.5.2. Project analytics

5.6. Institutional Construction

5.6.1. Outlook

5.6.2. Project analytics

5.7. Residential Construction

5.7.1. Outlook

5.7.2. Project analytics

6 Key Industry Participants

6.1. Contractors

6.2. Consultants

7 Appendix

7.1. What is this Report About?

7.2. Definitions

8 About GlobalData

8.1. GlobalData at a Glance

8.2. GlobalData Construction

8.3. Disclaimer

8.4. Contact Us

List of Tables

List of Tables

Table 1: Construction Outlook

Table 2: France, Key Economic Indicators

Table 3: France, Construction Output Value (nominal, EUR Million)

Table 4: France, Construction Output Value (nominal, US$ Million)

Table 5: France, Top Commercial Construction Projects by Value

Table 6: France, Top Industrial Construction Projects by Value

Table 7: France, Top Infrastructure Construction Projects by Value

Table 8: France, Top Energy and Utilities Construction Projects by Value

Table 9: France, Top Institutional Construction Projects by Value

Table 10: France, Top Residential and Mixed-Use Construction Projects by Value

Table 11: France, Key Contractors

Table 12: France, Key Consultants

Table 13: GlobalData Construction Market Definitions

Table 14: Construction Risk Index Ratings and Scores

List of Figures

List of Figures

Figure 1: Key Markets, Construction Output Growth Matrix and Risk Matrix

Figure 2: France, Construction Projects Pipeline by Sector (EUR Billion)

Figure 3: France, Dwellings Authorized (Total Numbers)

Figure 4: France, Housing Loan Issued (EUR, Billion)

Figure 5: France, Industrial Building Permits (Unit, Thousand)

Figure 6: France, Risk Profile

Figure 7: France, Risk Comparison

Figure 8: France, Construction Output Value (Real, US$ billion, 2017 prices and exchange rate)

Figure 9: France, Construction Output Value, Growth Matrix

Figure 10: France, Construction Output Value, by Sector (EUR Million), 2014–2023

Figure 11: France, Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 12: France, Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 13: France, Commercial Construction Output by Project Type (EUR Million), 2014–2023

Figure 14: France, Commercial Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 15: France, Commercial Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 16: France, Industrial Construction Output by Project Type (EUR Million), 2014–2023

Figure 17: France, Industrial Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 18: France, Industrial Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 19: France, Infrastructure Construction Output by Project Type (EUR Million), 2014–2023

Figure 20: France, Infrastructure Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 21: France, Infrastructure Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 22: France, Energy and Utilities Construction Output by Project Type (EUR Million), 2014–2023

Figure 23: France, Energy and Utilities Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 24: France, Energy and Utilities Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 25: France, Institutional Construction Output by Project Type (EUR Million), 2014–2023

Figure 26: France, Institutional Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 27: France, Institutional Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 28: France, Residential Construction Output by Project Type (EUR Million), 2014–2023

Figure 29: France, Residential Construction Projects Pipeline, Value by Stage (EUR Million)

Figure 30: France, Residential Construction Projects Pipeline, Projected Annual Spending by Stage (EUR Million), 2018–2023

Figure 31: France, Headquarters of Key Contractors (% of Total Project Pipeline)

Figure 32: France, Headquarters of Foreign Contractors (% of Project Pipeline with Foreign Contractor)

Figure 33: France, Headquarters of Key Consultants (% of Total Project Pipeline)

Figure 34: France, Headquarters of Foreign Consultants (% of Project Pipeline with Foreign Consultants)

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