15 Jun 2020
Posted in Construction
Italy’s construction industry set to contract by 7.4% in 2020 due to COVID-19 lockdown measures
Italy’s construction industry is expected to shrink by 7.4% in 2020 as a result of the lockdown measures to contain COVID-19, according to GlobalData, a leading data and analytics company. The number of daily new confirmed cases in Italy has dropped significantly, from a peak of 6,557 cases on 22nd March to just 318 cases on 2 June which has led to the further easing of the lockdown.
Business confidence in the construction sector fell in March, according to Istat Economic Sentiment Indicator. The seasonally adjusted 2020 confidence climate in the construction sector (base 2010=100) declined from 142.3 points in February to 139 points in March, with a further decline in May to 108.4.
Danny Richards, Lead Economist at GlobalData comments: “Emergency measures taken by the government to restrict movement and in effect place the country in lockdown has created major downside risk for the Italian economy and the construction sector. The most affected northern region which is also the financial and economic hub of the country accounted for an estimated 32% of total construction output in 2019.”
There have been some signs of progress in recent weeks, with the Italian construction firms, Salini Impregilo and Astaldi, announcing in early April the resumption of construction work on Milan’s new metro line. Construction work has also resumed on all three tunnel sections of Milan’s subway extension project.
Richards adds: “Infrastructure construction, which registered solid growth in 2019, will struggle to retain growth momentum in the coming quarters given the hit to government finances. However According to the Italian Association of private construction contractors (ANCE), around 750 public works projects in Italy worth EUR€62bn (US$68bn) were on hold at the end of last year and restarting them could provide the boost the construction sector needs and help the wider economy.”