Job cuts in construction: How far will the waste go?

Following Vinci and Nexity, Bouygues announced cuts to its workforce in France. And it’s not just older groups suffering from the housing crisis. In 2023, more than 10,000 construction contractors may find themselves unemployed.

Relevance Will drastically cut its workforce in France. This is the third major group to announce job cuts in the construction sector. It is also the only one that is so precise in the objective to be achieved, neither of the Vinci Nor has Nexity, when announcing its own workforce reduction plans, provided numerical details. The voluntary departure scheme and PSE’s announcement will result in the reduction of 225 jobs, or approximately a quarter of the workforce.

It’s not just big developers who are cutting jobs. We can no longer count the number of small businesses in trouble due to this housing crisis. Only one figure allows us to measure the extent of this bleeding. In 2023, 10,219 construction entrepreneurs found themselves unemployed, i.e. 40% more than last year,

Blame rising rates

And it’s probably not over yet. Last fall, the French Building Federation estimated that by 2025, the workforce of companies in the sector – from the smallest to the largest – would shrink by more than 10%. 150,000 jobs So it should have been removed.

The reason for this crisis is known. There increase in interest rates Mechanically the demand decreased. Because rates increase month-to-month, this means higher monthly payments. And hence the share of households whose income became insufficient to obtain loans is increasing. Many French people had no choice but to give up buying both old and new.

When we add up all the real estate programs of developers and the construction of individual homes, an observation emerges: we can no longer talk about a decline but about a decline in sales of new homes. We went from over 100,000 in 2022 to less than 70,000 last year. In two years, sales of new homes have declined by nearly 40%.

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