French construction production rebounds strongly in the third quarter
Summary for decision-makers
Construction production in France saw a significant improvement, rebounding 35,5% in the third quarter of 2020, despite a 4,8% decline year-on-year. However, GlobalData maintains its forecast for a full-year contraction of 11,6%, as rising COVID-19 cases led to a new four-week lockdown. While construction sites are allowed to remain open, the health situation could lead to additional closures, impacting the sector's economic outlook for the fourth quarter.
The restrictions imposed by the French government will impact the entire economy, and INSEE predicts a contraction in the fourth quarter. The combination of containment measures and a less favorable economic environment could weigh on production in the construction sector. In this regard, it is crucial for policymakers and industry professionals to take strategic measures to mitigate the effects of this expected contraction and identify opportunities for innovation and growth in an uncertain economic climate.
Following the release of data from the National Institute of Statistics and Economic Studies (INSEE) showing a strong quarterly rebound in French construction production in the third quarter of 2020.
GlobalData forecasts French construction sector to contract by 11,6% in 2020 despite Q3 recovery
Moustafa Ali, economist at GlobalData, a leading data and analytics company, offers his perspective:
“Despite this strong growth in Q3, GlobalData maintains its forecast that construction output will contract by 11,6% in France over the whole of 2020. While conditions in the country’s construction sector have improved significantly – with a 35,5% quarter-on-quarter rebound in Q19 – the sharp rise in COVID-4 cases over 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 less favorable outcome to QXNUMX than currently anticipated.
"On an annual basis, construction production in France was still down in Q3 2020, contracting by 4,8%, according to IN SEE, and resulting in a cumulative decline of around 15% over the first three quarters of the year. Construction was among the fastest-growing sectors in Q3, with work resuming after being suspended in the previous two quarters.
"While construction sites will be allowed to remain open, the restrictions are expected to affect the entire economy - with IN SEE now expecting a contraction in the fourth quarter. Lockdown measures, coupled with a weaker economic outlook, will weigh on the construction sector."
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