According to the FNTP, the public works sector anticipates a stable year in 2024, albeit with contrasts by region and type of customer, following a more satisfactory year overall in 2023 than forecast. Local authorities, with a cash position of over €70 million and a favorable debt situation, should continue to invest. However, two factors are disrupting this dynamic: the impact of the real estate crisis on the operating revenues of the départements, and the impact of the 2024 Olympic Games on public works activity in the Paris region. Indeed, given the moratoria on worksites with right-of-way for a large period around the event in certain areas of the region, the loss of business from local authorities could reach 800 million euros. Even so, the FNTP is forecasting 5% growth in local authority public works expenditure.
Transport and energy
With regard to State investments, the credits of the French Infrastructure Financing Agency (AFIT-F) are expected to increase by +20% in 2024, reaching €4.6 billion according to the 2024 Finance Bill (compared with €3.8 billion in 2023). According to initial announcements, most of this effort will be directed towards rail, urban and river transport operations. The new budget will also be used to launch the new generation of State-Region Planning Contracts (CPER).
As for the major operators, the outlook is positive for transport and energy. Investments by Société du Grand Paris (SGP) and SNCF Réseau should remain at their current levels. The ramp-up of the Lyon-Turin rail link (TELT) and the Seine Nord Europe Canal (for which the first TOARC lot has been put out to tender) should also boost public works activity, particularly towards the end of 2024. The energy sector (energy distribution, transport and production) continues to see an upward trend, driven by the dynamic markets for electrical terminals, network reinforcement for Enedis, renewable energy connections and interconnections for RTE. The effects of the construction program for the 3 new pairs of EPR2 nuclear reactors on the sector's activity should be reflected in initial preparatory work from 2025-2026, but should not really materialize until 2027.
Finally, the private sector remains the main point of warning in 2024. The year 2024 is likely to mark a turning point in the investment dynamic of private customers," notes the Public Works Federation. Rising construction costs and rapidly rising interest rates are weakening demand. The slump in orders for new housing is gradually spreading to the entire construction industry, which could lead to a -7% drop in public works activity linked to new housing. In some regions, projects for large-scale industrial sites could counterbalance this trend.
Overall, therefore, the sector expects to see a 2% increase in the value of its business in 2024. However, companies could find themselves in very different situations, depending on the structure of their customer base or their territory," emphasizes the FNTP. Dynamics will also vary greatly from one region to another.
