Summary

The Italian construction industry grew at a CAGR of 5.35% for the period 2003-2008. Non-residential sector's market share was 59.0% in 2008, while residential sector accounted for the balance 41.0%. In 2008, Italy's GDP declined by 1.0%, where as in the year 2007 it showed a growth rate of 1.5%. This deceleration was mainly due to the effect of the US subprime crisis which created liquidity crunch in the European markets. Added to this, weak dollar has made the Italian exports expensive, thereby affecting the trade. The cost of materials, energy, and petrol are rising day by day, effects of which are the higher labor cost, reduction in profit and decreasing purchasing power. Another reason for the negative GDP growth rate in 2008 was the political instability which resulted from the fall of 20-month old Prodi government. Italy's construction industry grew at a CAGR of 5.35% during 2003-2008.

Construction attracted lot of investment in Italy, especially during the period 1998-2007, where investments in construction sector increased by 29.4%. However, the spending rate declined considerably in the second half of 2008, due to global pressures, leading to a decline in construction industry production by 2.0% in 2008 over 2007. This fall in the growth rate can be attributed to overall slowdown of economy and liquidity crunch in the Euro region which has restricted the flow of investment. The construction industry had an alternative growth path in the past years. The slowdown in the economy has mostly affected the residential segment, whereas public work projects and non-residential and private works were less affected and showed a good growth. Residential segment which accounted for 41.0% of the construction output in 2008, declined by 1%. This decline in the residential segment was due to:

* Increase in the interest rates of home loan by 2.0%. This has lead to a negative impact as the customers increasingly prefer to take homes for rent rather than buying them through loan because of the high expenses involved.
* The residential market in Italy is very mature with 80% of the people owning houses and remaining 20% living in rented houses.
The prime area of work for the construction industry this year is industrialized city centers, and renovation of existing homes.

Table of Contents

Italy Construction Market Analysis
Italy Construction Competitive Landscape
Leading Italy Construction Companies
Italy Construction Market Forecast
Appendix