The construction sector is fundamental for the Italian economy, both in terms of investments and number of employees. In 2007, the sector accounted for 11.1% of Italy’s GDP and 8.4% of the Italian workforce. During the nine years from 1998 to 2007 investments in construction in Italy grew by 29.4%, twice as much as the country’s overall GDP.
However, the growth trend stopped during the second semester of 2008, mainly because of uncertainty surrounding both the Italian and global economies. As a result, the national association of Italian contractors had to revise its estimates for 2008 to reflect a -1.1% decrease in units constructed for the whole year (whereas previously it had forecasted modest growth). New residential construction projects and public works (a segment that had already been suffering for a few years) were particularly hard hit, while the trend for residential maintenance (restructuring) and non-residential private construction projects remained positive.
In 2009, investment in construction is forecast to decrease by 1.5%, due mostly to an ongoing reduction in new residential construction projects and to a cutback in public works. The only segment that is expected to continue growing is that of residential maintenance projects, because of tax incentives for restructuring.
The ongoing positive trend of residential maintenance projects presents good opportunities for insulation materials. Italian Legislative Decrees 192/2005 and 311/2007 set new requirements for insulation that must be applied to both new and existing buildings. A recently introduced tax deduction of up to 55% of the expenses for home renovations aimed at energy conservation is also expected to broaden the market for insulation products. These recent energy saving policies, introduced by the Italian Government upon suggestion of the European Union, will create opportunities for growth in sales of insulation materials.
The construction sector in Italy lags behind that of other countries in regard to the awareness of green building issues among sector professionals, the number of green building structures actually erected and the availability of green building materials. In Italy, discussion of green building issues traditionally has evolved not in academic and political circles, but rather among associations of professionals, mostly architects, who have been trying to promote green building among policymakers. Local (city and provincial) administrations so far have been fairly receptive to green building issues, and they are increasingly including green building products and techniques in their regulatory plans. Quantitative data on green building products in Italy do not yet exist. The main reason for that is the lack of an official, stable and agreed-upon definition of what exactly belongs under “green building”. However, the trend towards green building in Italy is certainly very positive and has been accelerating in recent years.
Planned short term infrastructure works by the Italian Government:
Although the Italian Government has reduced funding for new infrastructure for 2009 by as much as 14.2% vis-à-vis 2008, the plan is still to devote 16.6 billion Euros to the construction of much needed infrastructure. Out of the above amount, about 7.3 billion Euros can be classified as “new financing” by the State and have been recently (December 2008) authorized; the remainder of the amount had already been set aside during 2007 and concerns mostly highway works. The Government is expected to approve the final versions of those projects in early 2009.
Out of the 7.3 billion Euros in new financing, 2.5 billion had already been earmarked for the State-owned Italian Railway and Shipping companies as well as for the national road and highway network. The remaining 4.8 billion Euros will be devoted to works in the Southern (4 billion Euros) and in the Northern and Central (800 million Euros) parts of Italy. Northern Italy is also expected to receive an additional 1.5 billion Euros in financing, as well as 800 million Euros that have already been earmarked for the project intended to protect the city of Venice from floods. While financing for single infrastructure works has not yet been assigned, it is already possible to identify some of the priority works:
In Southern Italy the Salerno – Reggio Calabria highway, the Jonica main road, the Messina – Catania railroad, a few waterwork projects, as well as the subways in Naples and in Palermo.
In Northern and Central Italy, two main groups of works compete for funding: the Expo 2015, which will be held in Milan, and a few strategic railroad projects that are ready and waiting for funding.