Market Trends of Italy Construction Industry
This section covers the major market trends shaping the Italy Construction Market according to our research experts:
The Residential Sector is Witnessing Lucrative Growth
The pandemic affected the residential sector, but now the sector is recovering to pre-pandemic levels as the number of residential dwellers increased. In addition, in residential buildings, the number of dwellings increased at a growth rate of 2.9% in Q3 2021 compared to the previous quarter. Also, the useful floor area increased at a growth rate of 3.6% compared to the previous quarter.
Building permits for new dwellings increased by 17.7% in Q3 2021 compared to the same quarter in 2020. Meanwhile, the useful floor area was up by 17.5% compared to 2020. In addition, building permits for non-residential buildings increased by 15.5% in Q3 2021 compared to the previous quarter and experienced a growth rate of 22.4% in Q3 2021 compared to the same quarter in 2020.
According to ISTAT, more than 15,295 housing permits were given in Q3 2021, with a floor area of 1.35 million square meters. Furthermore, Southern Italy experienced growth in the residential sector due to the rise of 'smart working' and work-from-home setups. Also, the country's low property tax is boosting house ownership in the sector.
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The Construction Sector is Experiencing Significant Growth
The Italian construction sector was hard hit by the pandemic, but despite the crisis, the sector has been recovering to the pre-pandemic levels. Construction activities in the residential sector, infrastructure sector, and commercial sector increased significantly. For instance, in January 2022, the architecture studio Barreca & La Varra designed a social housing project for Milan called L'Innesto, which will be carbon-neutral and encourage community self-management through shared spaces. This project includes 400 apartments, 300 student housing units, and four hectares of public green space.
Furthermore, the infrastructure sector is witnessing robust growth in construction activities because under the National Plan for Recovery and Resilience (PNRR), the Italian government approved USD 266 billion in 2021 for the renovation of the country's economy from the pandemic crisis. From this recovery and resilience plans (RRPs) infrastructure for the sustainable mobility mission, the government has allocated EUR 32.0 billion for infrastructural investment, including EUR 28.3 billion in high-speed railways and road maintenance EUR 4 billion as well as EUR 3.7 billion in intermodal transport and integrated logistics.
Under the RRPs mission 3, megaprojects will be constructed in the span of five years (2021-2026), such as the construction of Southbound high-speed rail links for passengers and freight, high-speed lines in the north connecting Europe, diagonal connections, and increasing port capacity by expanding the port constructions.
Furthermore, in January 2022, the construction output slightly declined by 0.9% over the previous month, despite the decline in the production index in construction increasing by 4%. In addition, year-on-year, the unadjusted index for construction output increased by 17.2%, while the calendar-adjusted index rose by 13.2% in January 2022.