Italian Construction Sector Starts 2025 with Modest Growth

The S&P Global Italy Construction PMI rose to 49.4 in May 2026, up from 44.8 in April, which was the lowest in over three and a half years. The latest reading points to the mildest decline in activity in three months and suggests conditions are nearing stabilization. Activity and new orders continued to fall but at the slowest pace since February. Weakness remained centered on housing and commercial construction, while civil engineering returned to growth. Firms cited subdued demand, uncertainty, and difficulty securing tenders as key drags on activity. Meanwhile, business confidence improved, with firms turning optimistic on the 12-month outlook amid expectations of new contracts. On the labor front, employment growth accelerated to its strongest since January despite lower subcontractor usage. Still, supply-chain delays and cost pressures linked to the Middle East conflict persisted, and input costs rose at the second-fastest rate since September 2022 despite easing from April.

The S&P Global Italy Construction PMI fell to 44.8 in April 2026 from 46.8 in the previous month, marking the sharpest contraction since August 2022. The downturn was broad-based across all three sub-sectors, led by a steep decline in civil engineering activity, while housing and commercial construction also fell at similar rates. New orders recorded their strongest drop since August 2024, with uncertainty linked to the Middle East conflict prompting clients to delay projects amid concerns over elevated price pressures. Moreover, supply chain disruptions from the Middle East conflict led to a marked lengthening in lead times. Meanwhile, constructors continued to report job creation, although the pace of hiring was the weakest so far this year. On the price front, cost inflation rose to a four-year high, driven by higher energy, fuel, transport, and raw material costs. Looking ahead, expectations for the next twelve months remained muted, with sentiment slightly pessimistic overall.

The S&P Global Italy Construction PMI fell to 46.8 in March 2026 from 50.4 in February, signaling a renewed contraction and the sharpest decline since August 2024. Activity dropped across residential, commercial, and civil engineering segments, pointing to a broad-based slowdown. The decline was driven by weaker demand and a renewed fall in new orders, reversing February’s brief rebound, while firms reduced purchasing in response to lower workloads. Supply chains remained strained, with delivery times lengthening amid disruptions linked to the Middle East conflict. Cost pressures intensified, with input price inflation rising to its highest level since October 2022, driven by higher energy and material costs. Despite the weaker environment, employment continued to grow modestly as firms worked through existing projects. Looking ahead, sentiment turned negative for the first time in over three years as firms grew more cautious about the outlook.