Italy Construction Activity Falls to 4-Year Low

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.

The S&P Global Italy Construction PMI fell to 45.4 in June 2026 from 49.4 in May, signaling a sharper contraction in construction activity after conditions had shown signs of stabilizing in the previous month. Output and new orders both declined at faster rates, reflecting weaker demand, delivery delays, and fewer working hours due to extreme heat. Activity fell across all sectors, with civil engineering posting the steepest decline in 16 months, while commercial construction recorded the mildest contraction. Employment also decreased for the first time in 22 months and at the fastest pace in over six years as firms reduced headcount following project completions and weaker workloads. On the price front, input cost inflation eased to a four-month low but remained elevated due to higher raw material and oil prices linked to the Middle East conflict. Lastly, business confidence weakened amid uncertainty surrounding the National Recovery and Resilience Plan (PNRR) deadline.