Italy Construction PMI Falls Back into Contraction

The S&P Global Italy Construction PMI rose to 46.5 in September 2026, picking up from a four-year low of 41.7 in the previous month. The improvement was driven by a less marked decline in new construction orders, while employment also recorded a modest increase. Meanwhile, lead times continued to lengthen, reflecting the impact of the war in the Middle East, with logistical and transport disruptions and stock shortages weighing on supply-chain performance. On the price front, input-cost inflation accelerated to a four-month high, driven by higher outlays for raw materials, fuel, transport and energy. Among subsectors, all remained in contraction, with the steepest decline recorded in housing, while commercial construction signaled only a slight contraction. Looking ahead, Italian construction companies remained optimistic about output over the next 12 months, although confidence stayed below its long-run average.

The S&P Global Italy Construction PMI fell to 41.7 in August 2026 from 49.1 in the previous month, marking its fastest fall since August 2022, as construction activity declined sharply amid a solid drop in new work. The downturn was concentrated in housing and commercial construction, while civil engineering activity fell only modestly. New orders declined for the fifth time in six months, with firms citing weaker demand, geopolitical uncertainty, permit delays, staff shortages, and the end of the National Recovery and Resilience Plan (PNRR). Purchasing activity fell at its fastest pace in over three and a half years, while supply-chain pressures intensified. Meanwhile, cost inflation eased to its softest pace since the start of the year. Employment continued to rise slightly, but subcontractor use fell sharply. Business confidence returned to positive territory, supported by strong order pipelines, though concerns over the PNRR's end and weaker investment persisted.

The S&P Global Italy Construction PMI rose to 49.1 in July 2026 from 45.4 in June, signaling a softer contraction in construction activity, though the sector remained in decline for a fifth consecutive month. The slowdown in the downturn reflected renewed growth in commercial building activity, while declines in housing and civil engineering eased. New orders increased for the first time in five months, supported by improving customer interest and successful bids, prompting a modest rebound in employment after June's decline. Meanwhile, purchasing activity continued to fall as lower output reduced input requirements. On the price front, input cost inflation eased to its weakest level since February, although firms continued to face higher raw material, oil, and energy costs amid the Middle East conflict. Business confidence, however, remained subdued, with firms citing geopolitical uncertainty and the end of construction incentives as key risks to activity over the coming year.