News / Insights

The latest ISTAT data show that the construction sector ended 2025 on a generally positive note, but with signs of a slowdown at the start of 2026. Construction output grew by 3.9% over the full year 2025 (up to 4.8% when adjusted for calendar effects), with the fourth quarter still expanding. Signs of weakness emerged in the early months of 2026: February saw a slight cyclical recovery (+0.5%), but on average for the December 2025–February 2026 quarter, output fell by 1.1%, while year-over-year growth remained moderate (+1.4%).

Looking ahead, data on building permits point to a more fragile trend. In the fourth quarter of 2025, the residential sector shows a cyclical recovery (+4.5% in the number of dwellings and +2.8% in floor area) and growth on an annual basis as well (+8.7% and +10.0%), while the non-residential sector records a sharp contraction in the quarter (-12.4%) and substantial stagnation on an annual basis. Despite the improvement in the second half of the year, the overall balance for 2025 remains negative for the residential sector (-4.0% in the number of dwellings), signaling an underlying weakness in new supply.

The comparison between production and permits thus reveals a mismatch: while construction activity continues to be driven by projects already underway, new projects show signs of slowing down. This dynamic is part of a significantly scaled-back long-term trend: compared to the 2000–2012 period, when an average of approximately 48,000 housing units were authorized per quarter, volumes in the 2013–2025 period have fallen to just over 13,000 units, with a very significant contraction also in terms of floor area (-69% in residential and -58% in non-residential). The picture is further affected by the significant increase in construction costs (approximately +25% between 2013 and 2025), which is helping to curb the launch of new projects.