France announces fiscal stimulus package and exemptions for construction sites

17 March 2020 (Last Updated March 17th, 2020 17:40)

France announces fiscal stimulus package and exemptions for construction sites

The French Government has announced a large fiscal stimulus package to support construction firms and workers across the country as the virus outbreak worsens. With the number of people infected by the Covid-19 virus passing the 6,000 mark, the French Government has announced dramatic measures to try to halt the spread of the virus amid a worsening economic picture in the country.

The government has taken steps to contain the outbreak by closing schools and universities, as well as cancelling public gatherings. Non-essential business including cinemas, restaurants and cafes have also been closed. On 17 March, the French Government announced exemptions for key businesses including construction sites and equipment rental companies. However, construction sites are still expected to close once the quarantine measures are implemented. The French President Emmanuel Macron is expected to announce a lockdown for the next 45 days later on 17 March.

The French Finance Minister Bruno Le Maire announced on 17 March that he expects the economy to contract by 1% this year, which is down from the previous forecast of 1% growth before the virus hit the country. In response, the French Government has announced a €45bn ($50bn) stimulus package to help small businesses and workers who will be adversely affected by the virus. The minister has also pledged state aid and support for firms in the coming months’ worth €300bn ($390bn).

GlobalData expects the French construction industry to expand by only 0.6% in 2020 considering the impact of the virus outbreak, the forecast is contingent on the virus being contained by the end of the second quarter. In view of the latest developments, however, a further downward revision to the growth forecast in 2020 is likely. The industry is expected to rebound in 2021 and 2022 with growth of 1.1% and 2.1% forecasted respectively.