The Bank of Italy published its 2025 survey of industrial, service and construction firms, showing that sales at Italian firms with 20 or more employees were broadly unchanged in industry excluding construction and in private non-financial services after declining over the previous two years. Selling price growth slowed to 2.0 per cent from 2024, while employment continued to rise and hours worked increased slightly. Credit demand remained subdued but edged up, financing conditions were broadly stable, and investment accelerated overall, led by manufacturing and the energy sector. In construction, activity returned to growth in 2025, supported by public works and a slower decline in private construction. Across industry excluding construction and services, sales fell by 0.3 per cent in 2025, with weaker foreign demand partly offset by domestic demand. Employment rose by 1.2 per cent for a fifth consecutive year and hours worked increased by 0.7 per cent. Investment grew by 4.6 per cent overall, with manufacturing investment rebounding by 5.4 per cent and energy and extractive industries rising 12.1 per cent, while service-sector investment slowed to 2.1 per cent. In construction, output increased by 2.8 per cent, driven by a 10.7 per cent rise in public sector construction linked to NRRP incentives, while private construction still declined, though less sharply than in 2024. For 2026, firms expect demand to remain weak overall, with stable sales and faster selling price growth across sectors. Investment plans point to a 4.9 per cent contraction, especially in manufacturing and among smaller firms, while employment is expected to keep rising at roughly the 2025 pace. Construction firms expect activity to stagnate in 2026, particularly among companies more exposed to public works, although employment prospects remain moderately positive.

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