Public Works and Underground Utilities: How to Stay Competitive in an Increasingly Challenging Market
Since 2020, crises have piled up one after another. COVID-19, the wars in Ukraine and the Middle East, soaring energy prices, shrinking public budgets, labor shortages and the climate emergency have all forced the public works sector to adapt rapidly. In 2026, uncertainty continues to grow. Faced with external pressures that companies cannot control, how can they continue to improve their performance? In this article: An industry under pressure for far too long The lasting energy shock Local government budget constraints Climate pressure: an issue that can no longer wait The recruitment crisis The hidden costs Taking back control of what you can control Technology doesn’t replace people—it empowers them. What this means in practice An industry under pressure for far too long The current year presents a particularly challenging landscape for the public works sector. Over the past six years, successive crises have left lasting impacts on costs, supply chains, margins and long-term business visibility. Against this already difficult backdrop, four major pressures are now converging. The lasting energy shock Brent crude oil, the global benchmark for oil prices, reached around $120 per barrel at the end of April 2026[1], its highest level since 2022 following disruptions in the Strait of Hormuz. For public works companies, which rely heavily on diesel fuel and petroleum-based materials, this volatility translates directly into higher operating costs. The situation is even more challenging as most government support measures introduced during previous crises—such as energy subsidies and price caps—have already been largely exhausted. Fuel is only part of the problem. Bitumen prices have increased by 65% since the beginning of the conflict in the Middle East[2], resulting in a 10–12% increase in asphalt costs. At the same time, other bitumen-based materials have risen by between 5% and 35%, while PVC pipes have also been affected by higher raw material prices[3]. For contractors, the impact is immediate: higher energy prices place direct pressure on project profitability and cash flow. Local government budget constraints Local authorities account for 58% of France’s public infrastructure investment[4], yet they are operating under increasingly constrained budgets. Associations representing local governments estimate that their investment capacity could decline by as much as 20% in 2026[5]. More specifically, financial support for municipal investment has been reduced by €200 million in the 2026 budget[6], representing a drop of nearly 11%. Beyond the figures lies a broader governance issue. Many local authorities struggle to plan infrastructure projects beyond a single political term due to budget uncertainty. When priorities must be set, underground utility networks often compete with more visible public projects such as roads, public squares or urban redevelopment. As a result, the maintenance and renewal of underground infrastructure frequently take a back seat. Today, only 0.66% of drinking water networks and 0.48% of wastewater networks are renewed each year[7]. Climate pressure: an issue that can no longer wait France has nearly one million kilometers of drinking water pipelines and approximately 400,000 kilometers of wastewater networks. The average leakage rate across drinking water distribution systems has reached 18.8%, meaning network efficiency stands at only 81.2%[8]. This represents more than one billion cubic meters of water lost every year—the equivalent of around 400,000 Olympic-sized swimming pools. At a time of increasing water stress and recurring droughts, reducing these losses has become essential. The need to renovate, inspect and rehabilitate aging infrastructure is clear, yet these projects are constrained by the budgetary pressures described above. Between 2019 and 2024, annual public investment in water and wastewater infrastructure averaged €5.3 billion, but this remains well below estimated requirements[9]. The energy transition is further accelerating demand for new infrastructure projects. The expansion of renewable energy—solar farms, wind farms and photovoltaic canopies—requires new electrical grid connections. The rapid adoption of electric vehicles is driving municipalities to install increasing numbers of charging stations. Meanwhile, district heating networks, which play a key role in decarbonizing urban heating, require major investments in pipelines and associated infrastructure. Many of these projects, once financed primarily by local authorities, are now attracting private investment where economic returns are sufficient. The energy transition is reshaping the entire utility infrastructure sector, creating demand both for the renewal of existing networks and the construction of new electricity, heating and pipeline infrastructure. For public works companies, this represents a genuine growth opportunity. The recruitment crisis: the silent challenge The public works sector is facing a structural challenge that continues to worsen: attracting, training and retaining skilled professionals. With nearly 256,000 employees across 7,562 companies in 2024[10], the industry depends on highly specialized expertise that takes years to develop and is difficult to replace. Yet careers in public works—diverse, highly technical and meaningful—continue to struggle with recruitment due to a lack of visibility and recognition. This shortage affects every role, from field operations and engineering to office-based functions, forcing companies to rethink how they organize their work. When skilled staff become scarce, the challenge is no longer limited to recruitment and retention. It also becomes a question of working differently, training more effectively and extracting greater value from every working hour. Operational efficiency becomes not only a driver of performance but also a matter of long-term resilience. All indicators point in the same direction. Energy costs, public budgets, recruitment challenges and climate pressures continue to intensify with no sign of easing. Against this backdrop, the French National Federation of Public Works (FNTP) forecasts a 3.2% decline in production volume and a 1.9% decline in market value for 2026, while production costs are expected to rise by 1.3%[11]. Financial pressure across the entire industry is therefore expected to increase further. The Hidden Costs Faced with these pressures, one area remains firmly within a company’s control: operational efficiency. And this is precisely where margins are won—or lost. Public works companies negotiate purchasing contracts, optimize schedules and monitor margins down to the last euro. They know exactly what an hour of excavator time costs, what an idle truck represents and what delays from subcontractors mean financially. Yet there is another category of
