Italy construction sector nears stabilization as new orders rise

Investing.com -- Italy’s construction sector showed signs of stabilization in September, with the headline HCOB Construction PMI rising to 49.8 from August’s one-year low of 47.7.

The index, which measures month-on-month changes in total industry activity, approached the 50.0 mark that separates growth from contraction, indicating the least marked drop in output in three months.

New orders increased for the first time in three months, with companies attributing the improvement to greater customer interest and successful public tender bids. The rise in new business, although slight, supported continued job creation, extending the hiring streak to thirteen consecutive months.

Housing was the only sub-sector to register growth, albeit fractional, while commercial and civil engineering both recorded declines, with civil engineering showing the stronger contraction.

In response to improved workloads, construction firms increased their purchasing activity for the first time in three months. Meanwhile, input price inflation eased to its lowest level in over five years, providing some relief to companies.

Despite these positive developments, business confidence weakened to a 13-month low. While firms remained generally optimistic about future activity, citing new site openings and increased workloads, uncertainty around tax bonuses was highlighted as a key concern.

"September’s data suggest that while the sector is not yet out of the woods, the worst of the recent downturn may be behind it," said Nils Müller, Junior Economist at Hamburg Commercial Bank.

Supply chains continued to face pressures, with average lead times on input deliveries increasing for the twelfth consecutive month.

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