FX.co ★ Italy Construction Downturn Eases in July

The S&P Global Italy Construction PMI climbed to 49.1 in July 2026 from 45.4 in June, indicating a slower pace of contraction in construction activity. Nonetheless, the sector remained in decline for the fifth consecutive month. The easing of the downturn was driven by a renewed expansion in commercial construction, alongside milder decreases in both residential building and civil engineering work. New orders rose for the first time in five months, supported by stronger client interest and successful tendering, which in turn led to a modest recovery in employment after a drop in June. At the same time, purchasing activity continued to shrink as weaker output reduced input needs. On the cost side, input price inflation slowed to its lowest level since February, though firms still faced elevated prices for raw materials, oil, and energy amid the ongoing conflict in the Middle East. Business confidence remained muted, with companies highlighting geopolitical uncertainty and the expiry of construction incentives as major threats to activity over the year ahead.