Italian construction activity registered a 51 points expansion in July in response to increased housing construction and new orders, according to the latest IHS Markit Construction Purchasing Managers’ Index (PMI).
The figure is above the recognized 50-point watermark of expansion versus contraction, but the pace of growth in domestic construction has slowed from the prior month’s reading of 51.6 putting at risk the widely held belief of a V-shaped recovery.
Italian companies that responded to the survey remained relatively cautious towards employment and purchasing activity, with both declining slightly, as the COVID-19 pandemic continued to weigh on overall activity.
More importantly, for the steel industry, commercial construction activity expanded fractionally while the growth of civil engineering projects contracted. Worryingly, survey respondents noted an increase in supplier shortages and logistical difficulties, leading to longer lead times.
Local construction companies anticipate operating conditions will continue to recover over the next 12 months in response to imminent government stimulus packages, which resulted in confidence indicators climbing to its highest since March 2011.