FX.co ★ Italian Construction Sector Returns to Expansion

In March 2025, the HCOB Italy Construction PMI climbed to 52.4, up from February's 48.2, signaling a return to expansion and the strongest growth in 15 months. This positive shift was primarily fueled by a robust recovery in new orders, notably within the commercial construction sector. Although residential construction also bolstered this growth, civil engineering persistently lagged behind, experiencing contraction, albeit at a decelerated rate compared to earlier months. Despite the sector's rebound, the costs for inputs surged to their highest level in 25 months, with companies pointing to increased raw material and energy expenses as the primary causes. Although purchasing activity saw an uptick, supply chain disruptions persisted, leading to prolonged delivery times. Employment within the sector grew for the seventh consecutive month, albeit at a slower pace than before. Looking forward, business confidence was on the rise as firms anticipated an influx of new contracts and increased infrastructure spending under Italy’s Recovery and Resilience Plan (RRP). However, overall optimism remained below historical norms due to concerns about potential project delays and broader economic uncertainties.