The 4 fractures of spring 2026

Construction

New construction is taking off again. But not for the right reasons.

A full analysis of costs, BT/TP indices and copper prices.

France's construction market is sending contradictory signals in May 2026. Building permits cumulated over 12 months reach their highest level since 2023 (source: SITADEL/SDES, Statistical Data and Studies Service of the French Ministry of Ecological Transition, March 2026), and the BT01 (national construction cost index, all trades) holds at 135.1 (INSEE, February 2026, +2.4 % YoY, year-on-year), a stability that nonetheless masks two major ruptures. On one hand, the office segment consolidates a rebound driven by the 2030 tertiary decree obligations. On the other hand, planning permits collapse by over 20 % year-on-year, and authorized demolitions follow the same trajectory, a consequence of a 2024-2025 base boosted by ZAN (Zero Net Artificialization, set by France's Climate & Resilience law) programs nearing their end.

🔍 Focus: cost indices weighing on your margins

Not all cost indices are equal. BT47 (national electricity cost index in construction) jumps +4.4 % year-on-year, vs. +1.9 % for TP02 (national civil engineering cost index). The cause? Copper, whose prices are skyrocketing (see box below). TP12a (national cost index for energy and communication networks) follows the same trend with +5.0 % YoY, the fastest in the index. For a dry network or EV charging stations project, this means a cost line appreciating 4 times faster than general inflation (+2.2 %).

📈 Market indicators, Construction

Copper (LME, London Metal Exchange, the global non-ferrous metals exchange; 3-month contracts): 6.59 USD/lb on May 12, 2026, i.e. about $14,500/t. Up +41 % year-on-year (source: London Metal Exchange / Trading Economics).
Why it matters: copper is the backbone of electrical networks, building finishing trades, and civil works equipment. A sustained rise passes through to BT47 and TP12a indices with a 6 to 9-month lag.

⚠️ The sustained rise in LME copper (+41 % YoY) combined with declining Chilean production in Q1 2026 (-6 %) signals lasting tightness. Electrical and network contractors' margins could contract further in H2 2026 if long-term contracts don't cover the increase.

→ All BT/TP/ICM/ICP indices + Q3 2026 forecasts in the Construction Newsletter

Real estate

The existing market has healed. New build is still in intensive care.

Decoding the 10-year OAT and the existing market's turnaround.

France's real estate market turned a page in May 2026. Existing home transactions return to a volume comparable to 2019 over 12 rolling months (Notaires de France, professional body centralizing real estate transaction data), driven by renewed credit access with an average fixed rate of 3.30 % (Banque de France, April 2026). Existing apartment prices per square meter stabilize around €11,555/m² in actual Q4 2025 data (Notaires-INSEE, official real estate price index, co-produced by Notaires de France and INSEE). But this healing of the existing market masks a persistent crisis in new construction: reservations continue declining year-on-year, office tertiary contracts, and new housing permits remain below pre-2020 levels. Two markets, two desynchronized cycles.

🔍 Focus: why the 10-year OAT (Obligation Assimilable du Trésor, France's 10-year benchmark government bond on financial markets) is the key indicator to track

Many buyers watch credit rates. Professionals watch the 10-year OAT. Why? Because banks partly refinance via French government bonds, and the OAT leads credit rates by 1 to 3 months. On May 14, 2026, the 10-year OAT stands at 3.75 % (source: Agence France Trésor, AFT, the agency managing the French State's debt), up 49 basis points year-on-year. Concretely: each 25 bps (basis points; 1 bps = 0.01%) rise in OAT translates, in the following weeks, into a 15-20 bps average increase on 20-year rates. An OAT at 4 % would push credit rates back toward 3.60-3.80 %.

📈 Market indicators, Real estate

10-year OAT (Agence France Trésor): 3.75 % on May 14, 2026, +49 bps year-on-year.
ECB (European Central Bank) key rate, April 2026: 2.75 % (paused after 2024-2025 rate cut cycle).
Why the pair matters: the spread between French OAT and ECB rate (100 bps) reflects France's sovereign risk premium. The higher this spread, the more expensive housing credit remains despite ECB cuts.

⚠️ If the OAT durably crosses 4 %, the credit window open since late 2024 will start closing. First-time buyers still hesitating in Q2 2026 could find themselves blocked by Q4.

→ Volumes by segment + regional prices + Q3 2026 forecasts in the Real Estate Newsletter

Transport

Volumes are holding. Hauliers are collapsing.

Understanding the volume/margin dissonance via the Baltic Dry Index.

France's transport sector experiences a rare dissonance in May 2026. On the physical volume side, all is well: heavy goods vehicle traffic (HGV: trucks over 3.5 tonnes) on motorways grows +0.8 % year-on-year, light vehicle traffic (LV: cars and light commercial vehicles) remains stable (0.0 % YoY), and the road freight services price index (RFT, Road Freight Transport) holds at 123.2, nearly unchanged for a year. Yet the business climate in RFT collapses to -12 points, its lowest level since the 2020 health crisis (source: INSEE monthly business survey). How to explain this dissonance? Volumes are there, but margins evaporate, between fuel costs, wages (collective bargaining revaluations 2025-2026), and recruitment tensions, the economic equation of hauliers deteriorates.

🔍 Focus: what the Baltic Dry Index tells us about the future

The Baltic Dry Index (BDI) is the most-watched indicator of global maritime freight. It measures daily charter rates for bulk carriers transporting raw materials (coal, iron ore, grains). On May 11, 2026, it stands at 2,978 points (source: Baltic Exchange), up +92 % year-on-year. For economists, it's a leading indicator of global industrial activity: when the BDI rises, it means China and Asia are importing more raw materials, so global manufacturing production is recovering. And +92 % YoY is massive. This mechanically signals a recovery in European road and container freight in H2 2026, with a 4 to 6-month lag.

📈 Market indicators, Transport

Baltic Dry Index (Baltic Exchange): 2,978 points on May 11, 2026, +92 % year-on-year. Highest level since December 2024.
Brent (ICE Futures, Intercontinental Exchange, where oil futures contracts are traded): ~$72/barrel after April 2026 ceasefire (vs $95+ at the Iran conflict peak).
Why the pair matters: the combination of high BDI + low Brent is historically the most favorable scenario for transport. World trade restarts, fuel costs drop. But this assumes a lasting ceasefire in the Middle East.

⚠️ If BDI maintains a level above 2,500 for 3 consecutive months, European road capacity will come under strain in Q3 2026. Hauliers who survived the 2023-2025 cycle could finally regain pricing power.

→ Traffic by mode + transport CPI + 6-month outlook in the Transport Newsletter

Economy

Inflation at 2.2 %. Food consumption at -1.1 %.

The goods vs services divergence and the ECB's stance.

France's economic outlook sends a deceptively reassuring signal in May 2026. French CPI (Consumer Price Index, France's official inflation measure) returns to the ECB target at +2.2 % year-on-year (INSEE, April 2026) and core inflation decelerates to +1.3 %, below target. But the Harmonised CPI (HICP, inflation calculated under common European standards, used by the ECB), the one the ECB uses for its decisions, comes in at +2.7 % YoY, a 50 bps gap that could weigh on Frankfurt's next decision. Most importantly, French households don't budget randomly: total consumption barely stagnates (+0.3 % YoY), but goods consumption drops -1.1 % while services jump +2.9 %. This is a lasting structural shift, not an accident.

🔍 Focus: goods vs services divergence, end-of-cycle signal?

Historically, when goods consumption declines for several months while services grow, it's a sign of a maturing economic cycle. Households prioritize immediately consumed items (restaurants, leisure, transport) over those bought and kept (appliances, furniture, clothing). Over the past 12 months, the cumulative gap reaches +4 points. This pattern recalls pre-2008 and late 2018-early 2019 phases, moments when European growth stumbled. Combined with falling household confidence, it's the most worrying signal of spring 2026.

📈 Market indicators, Economy

ECB key rate: 2.75 % (paused since February 2026, after 6 consecutive cuts between 2024 and 2025).
Market expectations (€STR futures, Euro Short-Term Rate: short-term euro rate used by markets to anticipate ECB decisions): 1 to 2 ECB cuts of 25 bps expected by end of 2026, conditional on HICP inflation below 2.5 %.
Why it matters: the ECB is trapped between French inflation at the ceiling and anemic European growth. Any bad HICP surprise in June could shift the monetary calendar.

⚠️ If household confidence does not recover by June 2026 and if goods consumption remains negative, the soft landing scenario will become fragile. The risk of a technical recession in France in H2 2026 would then rise significantly.

→ Detailed inflation + employment + Europe comparisons in the Economic Outlook Newsletter

This month's intuition

New construction is taking off again. But not for the right reasons.

🔍 Focus: cost indices weighing on your margins

The existing market has healed. New build is still in intensive care.

🔍 Focus: why the 10-year OAT (Obligation Assimilable du Trésor, France's 10-year benchmark government bond on financial markets) is the key indicator to track

Volumes are holding. Hauliers are collapsing.

🔍 Focus: what the Baltic Dry Index tells us about the future

Inflation at 2.2 %. Food consumption at -1.1 %.

🔍 Focus: goods vs services divergence, end-of-cycle signal?

The common thread: 4 sectors, 1 same message

May 2026 macro context

Get the next edition delivered straight to your inbox

Sources & methodology