The French construction industry is expected to shrink by 9.4% in 2020, although the French construction industry has been exempt from nationwide shutdowns since mid-March due to the new crown epidemic crisis.
Danny Richards, chief economist at GlobalData, said: "Although the blockade was relaxed and the construction industry was exempted from these measures earlier, due to strict measures taken by the government to curb the spread of the virus, Construction activities were disrupted." "The growth rate of the French construction industry fell sharply by 14.1% in the first quarter of 2020, reflecting the impact."
As government spending increases and economic growth slows, it is expected that the government’s fiscal position will deteriorate in 2020. Therefore, once the virus outbreak subsides, in the long run, the government may be restricted from investing in infrastructure projects.
The French government has plans to upgrade the country's infrastructure, and plans to expand subway lines, road works and the construction of new residences.
Richards added: "The residential market is the largest market in the French construction industry, but before the new crown epidemic crisis, it has been expected that the residential market will weaken by 2020, which reflects the decline in building permits in recent quarters." Due to rising unemployment and restricted income, housing demand is expected to slow significantly this year."
The project appears to have been severely interrupted. Vinci, the main French contractor, suspended the project in March and early April, but has since gradually resumed operations. According to reports, the company revealed that the virus outbreak had a negative impact on the business, and many projects in France have been shelved, and revenue is expected to drop significantly in the coming months.
Just in February this year, Vinci also announced its 2019 results, showing that its revenue increased by 10%, including the growth of the entire contracting business.
Vinci Chairman and Chief Executive Officer Xavier Huillard said in April: “Popularity has a significant impact on the activities of all business units of the group, including franchising and contract signing.”
