Country report France - Construction Labour Research

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European Institute for Construction Labour Research – Country Report FranceCLRobtained by transsectoral irregular commercial activities almost one third (30.2%) wasapportioned to this sector. The real contribution to GDP of the shadow economy in theconstruction industry ranks at the top just before the commercial services for persons with ashare of 29.2% (Willard 1989: 42).A more recent insight into the economic dimension of undeclared labour is given by the dataof the Central Agency of Social Insurance Bodies (ACOSS) regarding the volume of the callon unpaid social insurance contributions (Table 8). In 2002 this amounted to 681 million €(ACOSS 2003). This sum corresponds to about 2% of social insurance contributions of allenterprises registered with URSSAF.Table 8: Volume of Undeclared Social Insurance Contributions, 1996 – 2002 (Million Euro)1996 1997 1998 1999 2000 2001 2002Volume of social insuranceno no 34,216 30,941 33,785 36,522 34,719contributions checkedchange changeVolume of social insurance393 461 476 592 620 782 681contributions claimed by URSSAFSource: ACOSS 20034. Functioning of the Illegal Labour MarketBefore analyzing the functioning of the illegal labour market it seems necessary to evoke thesituation on the formal market in construction. The reason for this is that its functioning anddevelopment are strongly connected with the development of undeclared labour.4.1. The Formal Construction Labour Market: Situation and StructureThe French construction industry is very dispersed. In fact, in 2003 it numbered 285,000contractors. Of these, 268,000 had less than 10 employees. The proportion of smallenterprises has even grown over the past two decades (Table 9). These contractors are activemainly locally. Due to their limited resources, by far the greater majority can fulfil thefunctions of main contractors only for small or very specific sites. Frequently therefore therole of sub-contractor devolves to them. Also in a European confrontation the industry provesto be structured predominantly by small enterprises: Therefore the proportion of businesseswith less than 10 employees is greater than in Germany, Spain, Great Britain or the averagefor the other old EU-Member States. Only the Italian construction industry is morefragmented (DAEI 2004a). The enterprise fluctuation is also high. In fact at the end of thenineties for instance annually 15% of the total number of contractors was newly formedenterprises (Eurostaf 2000). Contrary to other industries, an increase in the number ofenterprises could be noted since the beginning of the nineties. The accumulation of structural“risk factors” (size, capital equipment, fluctuation, labour intensity) contributes to the fact thatthe industry is particularly exposed to the phenomenon of undeclared labour.Table 9: Contractors in private construction according to the number of employees, 1983-2003Employees 1983 1989 1993 2000 20030 to 10 300,000 287,000 258,000 259,000 268,00011 to 50 15,000 16,000 15,000 14,400 15,30051 to 200 2,100 1,700 1,700 1,400 1,500> 200 400 300 300 200 200317.500 305.000 275.000 275.000 285.000Source: FFB 200518
European Institute for Construction Labour Research – Country Report FranceCLRThe dispersal is not in contrast to a remarkable concentration trend: the large enterprises areamong the largest in the world. Their share in world trade in construction, engineeringconstruction and management contracting services amounted to 15% in 2002, which placedthem in second place directly below the US American construction companies. Their share inthe European market amounted in the same period to 27% (DAEI 2004b). The turnovers ofthe five largest concerns (Bouygues, Vinci, GTM, Eiffage, Spie) amount to about one third ofthe national industry turnover (EUROSTAF 2000: 14). Large foreign companies on the otherhand had problems in the past in establishing themselves. Apart from the comparably lowmargins in the domestic construction industry, indeed above all the presence of the nationalchampions with their well-developed regional networks is a decisive factor in this respect.Since going through a trough between 1991 and mid 1997, the economic development of theindustry has been characterised by a recovery. After an intermediate fall off in orders between2001 and 2003 the sector trends advanced again and continue to remain on a growth course.The structure of the demand for construction services is characterised by a predominance ofmaintenance and renovation work. Its share amounts to about 50% of total demand.According to INSEE (2006) data, in March 2006 among the enterprises questioned from theindustry the order books were full for more than half a year of full-time occupation by theiremployees. Every second business stated that it was short of production capacity. The mainreason for this was the scarcity of the workforce.The recovery of construction business since the end of the economic crisis at the end of thenineties is also evident from the increase in the number of employees by 3.6% between 2000and 2003. More than a third of them are employed in enterprises with less than 11 employees.A further third is to be found in enterprises with up to 50 employees (Table 10). It may benoted that employment by temporary labour agencies plays an important role. According toINSEE at present about 10% of employees in construction are employed in such a way.Table 10: Number of Employees According to Company Size in constructionEmployees 1983 1989 1993 2000 20030 to 10 310,000 316,000 290,000 296,000 305,00011 to 50 300,000 316,000 299,000 280,000 292,00051 to 200 190,000 163,000 152,000 130,000 136,000> 200 250,000 190,000 174,000 139,000 144,0001,050,000 985,000 915,000 845,000 877,000Source: FFB 2005An analysis of employment according to trades sectors shows that since the beginning of theseventies the proportion of employees in the main construction industry (gros œuvre) hasfallen from about 55% to merely 39% (Table 11). Since then an increasing number ofemployees is distributed rather more over the finishing trades. In particular the electrical,plumbing and wood working trades have been able to increase their share of employeessignificantly. At the same time enterprises have recruitment problems in these trades. 55 A recent study of the French government on the prolongation of the temporary limitation on the free movementof workers points to labour shortages among bricklayers, carpenters, roofers and joiners.19
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