FX.co ★ Italian Construction PMI Contracts Further in January

The HCOB Italy Construction PMI eased slightly to 47.7 in January 2026, down from 47.9 in December, marking the third consecutive month of contraction. This decline reflects a modest acceleration in reduced activity, new orders, and purchasing. Housing emerged as the most challenged sector, experiencing a significant downturn that heavily influenced the overall index, while commercial construction saw a slight decrease. Meanwhile, civil engineering fared somewhat better, showing a minor increase. Order volumes reduced at one of the sharpest rates recorded in over a year, as uncertainties curtailed demand, leading companies to cut back on purchasing inputs. Despite the softer workloads, employment growth reached a seven-month peak, with firms showing a preference for hiring permanent staff. Input cost inflation rose due to the increased prices of raw materials and energy, although overall cost pressures remained below long-term averages. Business confidence waned but stayed slightly positive, with firms anticipating future projects. However, uncertainties regarding the PNRR deadline dampened overall sentiment.