6th November 2025

Key Findings:

Activity increases as new order growth quickens
Jobs growth slows while purchasing quantities remain unchanged
Confidence improves to 17-month high

The Italian construction sector re-entered growth territory in October, after having signalled declines in each month of the third quarter of 2025. Although the upturn was centred on the commercial and housing sectors, civil engineering also made a clear move towards stabilisation.

Although the sector saw stronger inflows of new business and confidence levels improved noticeably, there were signs of a reluctance to spend on additional inputs and jobs growth was only slight.

Up from 49.8 in September, the headline HCOB Italy Construction PMI® Total Activity Index — which measures month-onmonth changes in total industry activity — rose back into positive territory, posting at 50.7 in October.

The renewed increase in total activity in October ended a three-month spell of contraction. Although only marginal, the rate of growth was the strongest since March.

At the sub-sector level, both housing and commercial signalled higher activity in October, led by the latter. Meanwhile, civil engineering only recorded a fractional drop in output and one that was much weaker than that seen in September.

Supporting the improvement in overall activity, the volume of new work placed with construction firms in Italy likewise increased at a modest pace. The rate of expansion quickened, however, and was the fastest seen since June. Surveyed respondents stated that new contracts had been signed, as well as seeing a rise in new customers and greater interest from existing clients.

When asked about their expectations for the year ahead, Italian constructors were more upbeat in October. Firms are widely forecasting greater new order inflows to support activity growth. The degree of optimism improved noticeably from September to its highest level since May 2024 and was back in line with its historical trend.

Subsequently, companies continued to add jobs at the start of the final quarter, although the rate of job creation was only mild. Meanwhile, the usage of subcontractors declined again, but at a slightly weaker pace.

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There was no change to the quantity of inputs purchased in October. Any increase in input buying in line with higher new orders at some companies was outweighed by those firms carrying out stock reduction, according to anecdotal evidence.

Nevertheless, suppliers were unable to meet promised delivery times in October, as average lead times lengthened again. There were reports of delays due to adverse weather conditions, transportation issues and stock shortages.

Reflective of increased energy and raw material costs, purchase prices meanwhile rose again. The rate of inflation intensified from September, but remained subdued compared to both the 2025 average as well as the historical trend.

Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said, “The Italian construction sector returned to growth in October after three consecutive months of contraction. The HCOB Italy Construction PMI rose to 50.7 from 49.8 in September, signalling a modest but welcome expansion in total activity. The improvement was driven primarily by gains in the commercial and housing segments, while civil engineering activity edged closer to stabilisation, following a notably weaker rate of contraction.

“New business inflows accelerated, with firms reporting fresh contract wins and increased client interest. Purchasing volumes were unchanged, and job creation slowed to the softest pace in over a year, indicating that firms remain cautious despite the uptick in demand. Supply chain pressures persisted, with surveyed firms reporting longer delivery times due to adverse weather, logistical issues and stock shortages. Input cost inflation picked up slightly, but remained subdued compared to both the 2025 average and the historical trend.

“Encouragingly, business sentiment improved markedly. The Future Activity Index rose to its highest level in nearly a yearand-a-half, aligning with its long-run average. Contributing to this more optimistic outlook were expectations of stronger order inflows in the coming year. While the recovery remains fragile and uneven across sub-sectors, October’s data point to a gradual reawakening of construction activity in Italy, as improving demand dynamics helped lift activity, and amid a renewed improvement in confidence at builders.”

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