Since the end of the health crisis, construction investment in Italy has risen sharply, reaching a level 63% higher in Q1 2025 than in 2019. Over this period, Italy’s GDP growth is entirely attributable to this increase in construction investment. This momentum sets Italy apart from other major European economies in recent times, and is largely due to the “Superbonus”, a particularly attractive energy and seismic renovation support scheme for Italian households, introduced in 2020. The scheme has boosted employment in the sector, but has also created significant recruitment difficulties.

However, this support now appears to be largely a thing of the past. By the end of 2024, most of the Italian government’s “Superbonus” spending had already taken place, and appeared to have translated into household investment in construction, taking into account the typical amounts and time lags in this sector. Business tendency surveys remain positive in the sector and therefore do not suggest any sharp decline in the very short term. This Economic Outlook therefore adopts a scenario of slowing construction investment in 2025 (+0.5% in real terms), with the strong momentum from European funds in the non-residential segment almost fully offsetting the decline in the residential segment. The decline could, however, be more pronounced from 2026 onwards, as support measures gradually fade away...