2023-06-03 06:28:00
At the head of the family business Paris Ouest Construction, Jean-Baptiste Bouthillon manages nearly 340 employees. On average, it builds regarding 1,000 homes each year in the Paris region. But that was before. For the 2023 financial year, he forecasts a first drop of -10%. And that’s just the beginning. “The worst is ahead of us and it will probably be in 2025,” he announces.
“The end of 2021 was quite prosperous because there were a lot of site launches, recalls the professional. On the one hand, under the effect of the Olympic Games but also because many promoters wanted to avoid having to undergo the new regulations of the RE 2020 which came into effect on January 1, 2022 (new environmental regulations). We are reaping the rewards today so there is activity. But since then, housing starts have dropped drastically. And that is what we are going to pay for over the next two years”.
Thus, the builder even imagines falling below the 500 dwellings mark within 2 years, a drop of 50% compared to 2022. “And nothing indicates a recovery. When we see the withdrawal rates, we understand that people are in doubt and that they prefer to wait”.
100,000 fewer jobs next year?
In addition to the drop in the number of constructions, the rise in prices may also have discouraged more than one. “The Covid has certainly disrupted the production chains causing loss of time and therefore money, but this is nothing compared to the soaring price of energy. This corresponds to 40% of the material costs. And, in the end, it’s a cost increase of 10 to 15%.
The new standards also have an impact on prices. “From 7% to 8%” according to Jean-Baptiste Bouthillon. The installation of heat pumps instead of gas boilers or the use of biosourced materials such as wood or low-carbon concrete have an impact on the final price.
New positions also weigh down finances, such as the one responsible for monitoring greenhouse gas emissions throughout the project. Concretely, the cost of construction was around 2,000 euros/m2 in Île-de-France before 2020. Today, it is more around 2,400 euros/m2, an increase of 20%.
The human cost is therefore likely to be terrible. Professionals speak of at least 100,000 fewer jobs next year. “The paradox is that to cope with all the construction starts two years ago, we hired a lot, especially among the executives and they are on permanent contracts. When the activity is going to drop, we all wonder what will happen. Clearly, I’m afraid I can’t keep everyone.”
Focus on renovation
The manufacturer is therefore seeking by all means to engage in new areas. And there is one that looks promising: renovation. “This market has been larger than the new market for 10 years now. And it’s a much more stable sector. With the bans on renting G and F classified accommodation in 2025 and 2028, calls for tenders will increase”.
By way of comparison, Jean-Baptiste Bouthillon points out that in Île-de-France, new buildings are built every year, the equivalent of 1% of existing housing, i.e. the stock will be completely renewed in 100 years. The renovation market is growing much faster.
“Until now, this represented 20% of our activities, but given the forecast growth in new construction, renovation might exceed 50%”. A good way also to try to save as many jobs as possible.
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