Ile-de-France construction deplores indirect costs 10 to 15% higher than in the provinces

Posted on 13 Jan 2022 at 18: 25

The new president of the French Building Federation Grand Paris Ile-de-France, Philippe Servalli, believes that the building sector across the Ile-de-France region has experienced a year of crisis. New housing construction promises to be the national cause for the coming year, particularly in the Paris region where mayors seem to favor residential areas.

What is the assessment 2021 of building production in Ile-de-France?

2021 is a year of crisis for housing in the Ile-de-France. Admittedly, there is a jump compared to 2020, but we are still not at the level of 2019, the reference year. We are almost coming back from a war, this is the case everywhere in France and more in Ile-de-France, which is the heart of the reactor.

The turnover of the Ile-de-France building should reach 37 billion euros in 2021, an increase of 13% compared to 2020 but still down 4.6% from 2019.

The margins of companies in the sector continue to deteriorate, due to the rise in the prices of materials and energy as well as the lack of availability of raw materials. The financial situation of companies is difficult with certainly rising purchase orders but weakened accounts.

Will the year 2021 be synonymous with a resumption of construction?

We are very cautious and it is difficult to advance. We have particular concerns about the construction of new collective housing. We exchange with the regional prefecture to identify the blocking points for new constructions. We feel a reluctance from town halls, who prefer to preserve the residential areas of their cities to collective housing.

The problem of recruitment persists. Three out of four executives are faced with this problem, which needs to be resolved urgently so that companies are able to respond to public calls for tenders in the building sector, which started to rise again timidly in the first nine months of 2022.

What are the difficulties specific to Ile-de-France?

The Ile-de-France region is faced with greater difficulties than in the region, in particular because of the transport tax and the production costs which are higher there. Traffic in the Paris region is impossible, leading to higher costs for companies that weigh on their accounts. In total, the indirect costs are 13 to 15 % higher than in the provinces.

Furthermore, VSEs and SMEs in Ile-de-France do not benefit from the fallout from the increase in public orders. Companies located at 37-2019 kilometers from Paris are often preferred because they are cheaper with lower wages than in the capital. Unfortunately, there is no specific clause in the calls for tenders to favor local or regional companies.