Italy Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Italy Construction Market is expected to register a CAGR of more than 4.5% during the forecast period.

The COVID-19 pandemic adversely affected the construction industry in Italy, recording a 6.3% contraction in output in 2020. However, the sector is recovering from the crisis and reaching towards pre pandemic levels. Meanwhile, the growth was supported by EU Recovery funds. the EU recovery funds will allow the government to accelerate investments in some projects.

Furthermore, to recover from pandemic hit economy, the Italy government unveiled a USD 299 billion spending package in 2021. This reform package includes USD 230 billion from the EU Recovery Funds and USD 37 billion will be raised from the Italian budget. Meanwhile an additional USD 32 billion will be spent on upgrading the country’s transport infrastructure.

In addition, residential sector, infrastructure sector, and civil engineering are driving the growth of the sector. Meanwhile, the Italy government offers various housing aid initiatives and funds for urban regeneration, including home purchase and / or renovation fund, ECO Bonus, Urban Renaissance Plan, Superbonus 110%, Funds for social housing in earthquake areas, etc. Furthermore, Italy government has allocated EUR 10.8 billion of its EUR 191.5 RRP for promoting social infrastructure and communities as well as EUR 4.2 billion towards developing territorial cohesion.

Key Market Trends

Residential Sector Witnessing Lucrative Growth

The pandemic affected the residential sector, but now the sector is recovering to pre pandemic levels. As the number of residential dwellers were increased. In addition, in residential buildings the number of dwellings increased at a growth rate of 2.9% in the Q3 2021, when compared with the previous quarter. Also, useful floor area increased at a growth rate of 3.6% compared to previous quarter.

Furthermore, building permits for new dwellings increased by 17.7% in Q3 2021 when compared to the same quarter in 2020. Meanwhile useful floor area was up 17.5% when compared to 2020. In addition, building permits for non-residential buildings increased by 15.5% in Q3 2021 compared to the previous quarter, and experienced a growth rate of 22.4% in Q3 2021 compared to the same quarter in 2020.

According to ISTAT more than 15,295 housing permits are given in Q3 2021, with a floor area of 1.35 million square meter. Furthermore, Southern Italy experienced growth in residential sector due to the rise of “smart working” and work-from-home setup. Also, the country’s low property tax boosting the house ownership in the sector.

Construction Sector Experiencing Significant Growth

Italy construction has hard hit by the pandemic, despite the crisis the sector is recovering to the pre pandemic levels. Construction activities in residential sector, infrastructure sector, commercial sector was increased significantly. For instance, Architecture studio Barreca & La Varra has designed a social housing project for Milan called L'Innesto, which will be carbon-neutral and encourage community self-management through shared spaces in January 2022. This project includes 400 apartments, 300 student housing units and four hectares of public green space.

Furthermore, infrastructure sector is witnessing robust growth in construction activities because under National Plan for Recovery and Resilience (PNRR), the Italy government approved USD 266 billion for renovation of country’s economy from pandemic crisis in 2021. From this recovery and resilience plans (RRPs) s infrastructures for sustainable mobility mission, the government has allocated EUR 32.0 billion for infrastructural investment including EUR 28.3 billion in high-speed railways and road maintenance EUR 4 billion as well as EUR 3.7 billion in intermodal transport and integrated logistics.

Under this RRPs mission 3, mega projects will be constructed in the span of five years (2021-2026), such as construction of Southbound high-speed rail links for passengers and freight, high-speed lines in the north connecting Europe, diagonal connections, and increasing port capacity by expanding the port constructions.

Furthermore, in January 2022, the construction output was slightly declined by 0.9% over the previous month, despite the decline the production index in construction was increased by 4%. In addition, year on year, the unadjusted index for construction output increased by 17.2%, while the calendar adjusted index rose by 13.2% in January 2022.

Competitive Landscape

The report covers the major players operating in the Italy Construction Market. The Italy market is highly competitive with several players competing for the major share. The market is fragmented, and the market is expected to grow during the forecast period due to the increase in the construction investments and up-coming major projects in the country. Furthermore, most of the players in the market are expanding their business by investing strategically in partnerships, acquisitions, etc. Some of the major players include Saipem, WeBuilder, Bentini Construction SpA, Grandi Lavori Fincosit SpA, etc.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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