France: ceramic consumption shadowed by construction weight

by Giuseppe Schirone, Prometeia

According to 2014 data, ceramic consumption in France has settled below 114 million square metres, with an 18.6% drop compared to 2007’s nearly 140 millions. France has therefore lost its leading position in Western Europe and now ranks second after Germany, both for consumption and as export market for Italy.

Since the mid-2000s France had performed better than Germany, and had become the largest market for ceramics consumption in Western Europe. This had been possible thanks to important investment cycles in construction (between 2000 and 2007 residential investments have risen by an average annual rate of 3.3%) and also thanks to consumer preference for ceramics as wall covering (pro-capita consumption in France is about 1.8 sq m, 25% higher than in Germany).

The following year, though, the context had considerably changed: investments in residential construction had dropped by a 3.5% per year, causing slightly less negative effects on ceramic consumption which had dropped by a 2.2% per year.

Taking all that into account, and considering a further decrease in construction investments (a 3.7% drop is expected in residential construction) the latest forecasts from Confindustria Ceramica and Prometeia indicate for this year a further fall in ceramic consumption (nearing 110 million sq m); while for the right conditions so as to start a process of recovery we should probably wait for next year.

Only 15% of French demand for ceramic products is satisfied by domestic production (more than 17 million square metres). While this percentage fell to 13% in the years 2010-2011, it is now going back to pre-crisis levels. Although there has been a shrinking in the industry (between 2007 and 2014 the production of ceramic products in France fell by 31%, that is 10.5 million/sq m), the domestic market absorbs three quarters of total production, while exports are back to 25.7% since last year – after being almost halved during 2008-2013.

Imports in France averaged about 97 million sq m both in 2013 and 2014: the last time it fell below 100 million sqm it was in 2000. According to forecasts, a further reduction of 2 million sq m is expected for 2015, while 2016 will see an increase back to 97 million sq m.
Within an environment of difficult markets, Italian manufacturing companies have been able to maintain their position on the market, proving themselves as leading suppliers for the French market: still in 2014, 48% of tiles imported by France (corresponding to 46.5 mil/sq m) came from Italy, while 28% came from Spain (on the increase), and just below 10% was from Portugal (slightly lower than in the past).

The analysis of the average import prices confirms Italian leadership: in 2014 Italian average prices were 14 €/sq m (with a 2.1% increased compared to 2013), 6€ higher than commodities imported from Spain and Portugal, and 8.5€ and 10.7€ higher than goods from China and Brazil.

In the economic forecasts drafted by Confindustria Ceramica and Prometeia and taking into account the structure of the French ceramic market, the macroeconomic outlook, the local construction industry, and access to the market for Italian companies, France ranks fifth (out of 56 analysed markets) in the world ranking of potential markets for Italian exports in the mid-term; and it ranks fourth (after United Kingdom, Sweden and Ireland) in the regional ranking of Western European countries.

Compared to 2013, France loses three places, mainly because of the mid-term macroeconomic outlook which is worsening, yet confirms itself as an important market for Italian manufacturing companies.