The short-term outlook for Italy s construction industry is tentatively positive, with growth forecast at -.-- in ---- - the first positive growth expected in eight years. Slightly stronger growth of -.-- is forecast in ---- based on the number of transport and power projects currently in the development pipeline. ...Slightly stronger growth of -.-- is forecast in ---- based on the number of transport and power projects currently in the development pipeline. While positive progress has been made on vital structural reforms, we do note that political risk is rising in the run up to the reform referendum expected in November ---- and a collapse of Matteo Renzi s governing coalition would derail the reform programme, weighing on both the short and long-term growth outlook. The -.- magnitude earthquake which struck central Italy in ----, destroying several historic villages and claiming almost --- lives, has thrown the spotlight on the prevalence of illegal construction in the country (government statistics put illegal construction at -- of buildings) and this could result in reforms to building code and planning enforcement. ...While positive progress has been made on vital structural reforms, we do note that political risk is rising in the run up to the reform referendum expected in November ---- and a collapse of Matteo Renzi s governing coalition would derail the reform programme, weighing on both the short and long-term growth outlook. The -.- magnitude earthquake which struck central Italy in ----, destroying several historic villages and claiming almost --- lives, has thrown the spotlight on the prevalence of illegal construction in the country (government statistics put illegal construction at -- of buildings) and this could result in reforms to building code and planning enforcement.
...We have made a further downwards revision to our short-term forecasts for Italy s construction sector this quarter. While construction growth improved in Q-, figures are not sufficient to fully offset Q- declines and as such we now expect growth for the year to come in at -.-- (down from -.- previously). ...We have made a further downwards revision to our short-term forecasts for Italy s construction sector this quarter. While construction growth improved in Q-, figures are not sufficient to fully offset Q- declines and as such we now expect growth for the year to come in at -.-- (down from -.- previously). At present we are broadly maintaining our forecasts for subdued growth of around -.-- over the remainder of the forecast period between ---- and ----. ...At present we are broadly maintaining our forecasts for subdued growth of around -.-- over the remainder of the forecast period between ---- and ----. While we do note some upside risk for ---- in light of expected reconstruction efforts, limited public spending capacity means this may entail a diversion of funding from planned projects.
...BMI View: Italy s infrastructure market faces significant challenges. Public spending capacity for construction projects remains low and private investor interest in a market hampered by labour market restrictions and ongoing corruption concerns is limited. ...
