FX.co ★ Italy Construction Activity Falls to 4-Year Low

The S&P Global Italy Construction PMI fell to 41.7 in August 2026 from 49.1 in July, marking the steepest contraction since August 2022, as construction activity declined sharply amid a pronounced drop in new work. The downturn was concentrated in residential and commercial building, while civil engineering activity recorded only a modest decline. New orders fell for the fifth time in six months, with firms reporting weaker demand, geopolitical uncertainty, permitting delays, staff shortages, and the expiration of the National Recovery and Resilience Plan (PNRR) as key headwinds. Purchasing activity contracted at its fastest rate in more than three and a half years, and supply-chain pressures intensified. At the same time, input cost inflation eased to its weakest pace since the beginning of the year. Employment continued to edge higher, but the use of subcontractors fell sharply. Looking ahead, business confidence returned to positive territory, underpinned by robust order pipelines, though concerns about the end of the PNRR and softer investment prospects persisted.