The Italian construction sector recorded a slight increase in May 2025, driven by stronger inflows of new business, the latest HCOB Italy Construction PMI report has found.
According to the report, the activity index rose to 50.5 in May, up from 50.1 in April, with the commercial building segment the main contributor to this growth.
Increased demand
‘Building companies showed increased demand for labour, with employment levels up at the most marked rate seen in 2025 so far, albeit one that was only modest,’ the report noted. Meanwhile, stronger cost pressures and a preference towards using up existing stocks of inputs led to a slight decrease in purchasing quantities.’
Residential construction declined slightly for the second consecutive month, with civil engineering remaining the weakest sector in the Italian construction sector, although the rate of contraction eased compared to the start of the year.
An increase in public tenders, new contract wins and demand driven by the National Recovery and Resilience Plan (NRRP) helped to drive volumes of new work in May, the data showed.
The growth in new orders was marginal, however it compared favourably with both the previous month and the long-term average. Purchasing activity was scaled back, albeit marginally, as construction firms used up existing stocks of inputs to support current workloads.
Input prices rose at a sharper pace due to higher costs for raw materials, energy, and transportation, however despite these cost pressures, sentiment within the sector remained positive.
‘Modest upward trajectory’
“Italy’s construction sector continued its modest upward trajectory in May, with the HCOB Construction PMI ticking up to 50.5,” commented Norman Liebke, economist at Hamburg Commercial Bank. “The latest increase in activity was primarily driven by a pick-up in new business and was centred on the commercial segment. While overall activity growth was marginal, firms cited better weather and stronger order books as key contributors.
“Inflationary pressures intensified in May. […] Despite these headwinds, sentiment among Italian construction firms remained upbeat. Around 30% of respondents expressed optimism about the year ahead, citing new project pipelines and site openings. While this confidence is still subdued by historical standards, it represents the highest level of positive sentiment seen for a year, a sign that Italy’s builders are cautiously laying the groundwork for a more sustained recovery.” Read more here.
