FX.co ★ Italian Construction Sector Contracts in July

In July 2025, the HCOB Italy Construction PMI experienced a decline to 48.3 from 50.2 in June, indicating the first downturn in five months and halting a brief period of growth. This reduction was observed across all three monitored sub-sectors, with civil engineering experiencing the most significant decrease. Companies cited decreased new orders, weak demand, and site closures as reasons for this contraction. Consequently, purchasing activity diminished at the quickest rate in almost a year, while employment growth decelerated and the use of subcontractors dropped. On the pricing front, input costs rose due to increased raw material prices, although overall inflationary pressures remained relatively low. Additionally, while supplier delays persisted, they showed signs of improvement. Business sentiment reached a six-month low, influenced by concerns over decreasing demand. Nonetheless, expectations for the coming year were cautiously optimistic, with Italy's outlook considered more stable than other major eurozone economies.