Italian Construction PMI Falls to 1-Year Low

The HCOB Italy Construction PMI slipped to 47.7 in August 2025 from 48.3 in July, signaling the sharpest contraction in a year. The downturn was led by steep falls in housing and commercial activity, which dropped to 13- and 24-month lows, though civil engineering provided some relief with its strongest growth since late 2023. Softer demand weighed on sales and pushed new orders lower, prompting firms to scale back purchasing at the fastest pace in a year and cut subcontractor usage at the sharpest rate in more than five years. Even so, employment continued to grow but only marginally, marking one of the weakest rates of the past 12 months. On the cost front, input prices rose again, but inflation pressures remained relatively muted, while subcontractor rates held broadly stable. Meanwhile, supplier delays persisted, though less severe than before. Looking ahead, business confidence ticked up from July, yet remained below the long-run average, reflecting ongoing caution in the sector.