The slowdown in new construction activity is hitting construction tradesmen hard. Bricklayers, heating workers, decorators… Many professions are affected.
“I’m worried, I don’t know how the situation will develop.”: Eyup Otuk, a heating engineer from Alsace, looks with some concern at the situation in the construction industry, where the activity of craftsmen is decreasing. “Are you okay? Is she graduating?” “Yes nickel!” On this rainy morning, Özcan Kucan and Rouslan Kazimagomew, two employees of a small plumbing and heating company, are installing a shower tray in a house under construction.
The building is located near a hop farm in Niederschaeffolsheim (Bas-Rhin), a town of 1,400 inhabitants north of Strasbourg, and is part of a subdivision of about twenty houses and two buildings, explains their boss Eyup Otup. In front of the entrance, pieces of broken bricks crunch under the workers’ feet. Inside, construction waste is littered on the floor, and electrical wiring protrudes from the still bare walls. “Construction started in 2022 and will be completed in the first quarter of 2024,” explains Eyup Otup, 36 years old. He started his company at the end of 2019 and currently employs four people who work mainly on construction sites in the Bas-Rhin.
Declining activity
In 2020, there were “many, many new projects”, “I did about 40 to 45” a year with two employees, recalls Eyup Otuk. “Today (…) we work around 70. But next year, if we reach 50, it will be very good…” With four employees, however, “I need (…) 70 or 80 projects” a year, he explains, dreading having to fire one of his employees.
A slowdown in new construction activity, which can be explained by the economic situation burdened by several major crises (Covid, the war in Ukraine) and their consequences (inflation, rising prices of raw materials and credit rates, etc.). The consequence for construction trades: activity fell by 1% in the third quarter of 2023 (-1.5% in Grand Est), new construction shows a decline of 3% in one year, according to their professional organization Capeb.
Bricklayers are most exposed, for whom erosion is 1.5% of their total turnover. Less affected heating engineers, property developers, roofers and even painters and plasterers reported a 0.5% drop, according to the same source. In the long run, the picture is troubling. “There has clearly been a decline in building permits, exceeding 30% nationally, notes Maurice Karotsch, president of Capeb du Grand Est.
“These are quite alarming numbers. The first affected companies are the construction and renovation companies, and within six months it will be the finishing works companies.” According to him, this decrease “will result, we do not hope, in the reduction of jobs”.
“The Future Is Unclear”
“Covid and then the war in Ukraine really accelerated everything else,” analyzes Eyup Otuk, citing a “100%” cost increase for certain products. For now, the entrepreneur refuses to panic: “the schedule is packed for the next six months,” says Eyup Otuk, whose company is backed by a developer-builder who handles 95% of his projects, almost exclusively single-family houses. .
But from a longer-term perspective, things are less certain: “I’m worried because I don’t know how the situation will develop,” he confides. “Today, rates are still rising, so the future is unclear…” Its employees seem to see things with more calm: “There have been troubles before”, especially the 2008 crisis, “and then this happened”, philosopher Özcan . 54 years old, heat pump specialist. “It’s not a concern for me. There will always be heat pumps to install. It’s the future.”
For his part, Eyup Otuk calls for a return to “normality”: “activity must return to what it was before the war in Ukraine”, he says. “It will start again. But when?”