The construction industry in France is facing a severe downturn, with reports of shrinking revenues and potential job losses, according to industry groups. The French Federation of Construction (FFB), a major industry group, has warned that the sector could lose an additional 20,000 jobs by 2026. Over four years, the sector’s overall activity is expected to decline by 12.3%, a level that the FFB compared to the "low level of the late 1990s." Frédéric Carré, the FFB’s president, described the situation as "unscrewing and we do not know where we are going," indicating the sector’s uncertainty and instability. While new construction activity is projected to rise by 3.8% in 2026, Carré called this an "illusion," noting that the number of new construction projects is still 17% below the average of the last 40 years. Only 302,000 homes are expected to be started in 2026, which is 50,000 fewer than the historical average. Permits for new construction have also continued to decline, with the Federation of Property Developers (FPI) reporting that the start of 2026 was even worse than 2025, with new housing sales reaching their lowest point. The "improvement and maintenance" segment, which now accounts for 60% of the construction sector’s activity, is expected to see a 2.9% drop in revenue in 2026. Energy renovation of homes, a key component of this segment, declined by 4.5% in the second quarter of 2026 compared to the same period in 2025. Carré emphasized the urgent need for energy-efficient upgrades, pointing to the 3.9 million homes in France that are considered energy inefficient. He criticized the government for reducing financial support for such renovations and altering the rules for the MaPrimRénov' subsidy program, which now excludes certain cost-effective measures like attic insulation and window replacement—services that often benefit lower-income households. The ongoing war in the Middle East has contributed to a 4.3% increase in the prices of construction materials, which could further strain the profit margins of construction companies. The FFB noted that for every euro of aid or tax incentive invested in new construction, the government generates two euros in tax revenue, primarily through value-added tax (VAT). However, the decline in new housing has already cost the state nearly 5 billion euros in VAT between 2022 and 2025. The FFB predicts 12,000 business failures and 20,000 job losses in 2026. Carré is hoping for support measures in the 2027 state budget and is encouraged that housing issues are now being discussed in the context of the upcoming presidential election, with plans to engage with all candidates on the topic.