2024, how many thousands of bankruptcies and layoffs?

Indeed, the construction sector in France is facing a “perfect storm” for 2024, a crisis that promises to be on an unprecedented scale. The indications in 2022 and 2023 were already alarming, during that period it could have been crucial to address the root of the problem. By removing part of the excess from the market, price corrections would have played a regulatory role, but this did not happen significantly enough to reverse the trend.

Supply shocks to construction and rentals are essential to respond to the current real estate crisis. However, in the current context, due to rapid inflation and rising construction costs, stimulating supply is proving particularly critical. The state’s initiatives, though laudable, risk producing impacts only in the medium term i.e. 2025 or 2026, thus putting the sector in a precarious position for the next ten months.

The state seems to lack a clear and coherent vision for the housing and construction sector. Without a bold policy shift, we are unlikely to see fiscal shocks that could revive the sector in the near term. Low interest rates may provide some relief at the end of the year, but the lag between a monetary policy decision and its impact on the real economy means that the effects will only be noticeable from September, at best.

So the players in this sector should expect to go through a very difficult period in the next eight months. It is now too late to avoid a crisis, and the priority should be to survive this turbulent period. My warnings, although serious, are the fruit of twelve months of hard work on a report dedicated to this crisis since March 2023. I tried to warn the public authorities and I contacted very early on the coming maelstrom in the stands, from mid-2022.

Today, it is imperative to prepare to weather the storm and implement resilience strategies for companies in the field.

According to one Study In France, the number of real estate agency failures increased by 116.7% to 910 in 2023, published by Altares firm. That’s about it “bad” A trend in the construction sector, Altares points out. A sector that saw the number of business failures accelerate to 14,112 last year, an increase of 40.7%. So much so that construction accounted for nearly a quarter of business bankruptcies last year. Business failures in construction are expected to accelerate further in 2024, and the French building federation fears 90,000 job losses this year. Loic Cantin, president of Pnaim, says nothing else: “We will close 1,400 real estate agencies by the end of 2024”. A figure corresponding to the peak recorded in October 2009 during the subprime crisis, American subprime mortgage loans

These figures reflect the difficult economic reality for companies in the sector, which are forced to navigate an increasingly uncertain and hostile environment.

The housing crisis in France is complex and multifactorial. It requires deep thinking and a global approach, taking into account both the challenges of the present and the issues of the future. This is a major challenge for the government and French society as a whole.