Overall construction activity

The recovery in Italian GDP exceeded expectations in 2021, following a sharp decline in 2020 due to the effects of the COVID-19 pandemic. The Italian National Institute of Statistics (ISTAT) reports an increase in 2021 GDP of 6.6% compared to 2020. A remarkable contribution to growth was provided by domestic demand, especially by gross fixed capital formation, which rose in volume by 17.0%, primarily driven by the construction component. In fact, the National Association of Italian Constructors (ANCE) estimates that the construction sector accounted for over a third of GDP growth.


The European Commission forecast for Italy's GDP growth in 2022 is +4.1%, (down from the +4.3% it predicted in November). In this respect, the recent international geopolitical crisis has deeply changed the general framework, as well as the prospects for the Italian economy, triggering a further acceleration in the prices of energy and food commodities. The Russian Federation is a critical trade partner for Italy for the supply of raw materials, accounting for over 40% of Italian natural gas imports, and for over 10% of Italian refined petroleum products’ imports. Due to the uncertainty brought by the geopolitical crisis and the soaring energy prices, ISTAT estimates a negative effect of 0.7% on the Italian GDP in 2022.

In the Construction sector, for the first time in many years, and following a setback in the first year of the pandemic, investments showed some dynamism in 2021. ANCE estimate for 2021 overall construction investment suggests an impressive growth of +16.4%, in real terms, deriving from generalised increases in all sub-sectors.

Such a considerable growth is not to be regarded as a mere post-pandemic rebound since, in comparison to 2019 (a pre-pandemic year) the increase still remains significant (+9.1%) and confirms the beginning of a period of gradual recovery in the construction sector.

The 2021 growth (+16.4%) will allow for a full recovery of the pre-pandemic levels, following the -6.2% decline recorded in 2020. Nevertheless, the gap in production levels remains wide if compared to the levels experienced prior to the sector crisis: -28.8% investments in the comparison with 2007, accounting for an average loss of 60 billion Euro a year in construction investments.

The notably positive trend is especially derived from housing redevelopment, which has increased by over +20%, exceeding the expectations set out at the beginning of the year, mainly due to the exceptional effects of  tax rebates measures.

Civil engineering is also estimated to have had a significant increase (+15.0%) in confirmation of the positive results produced by the measures introduced over the last years in support of public investments. A positive contribution also derived from an early acceleration determined by the launch of the National Recovery and Resilience Plan (NRRP) limited to the ongoing investment included in the European Plan.


At the same time, the Italian residential real estate market has increased beyond expectations with a +34% growth in the number of housing transaction in 2021 Year-over-Year (YoY). A significant contribution to such a remarkable result derives from peripheral markets (+36.5%), as well as from regional and provincial capitals (+27.7%).

The real estate market was affected by both the willingness of the private financial system to support lending (+30.4% mortgages issued to households), and by the appearance of new housing needs in connection with the COVID-19 pandemic emergency, which has created a new household demand for wider spaces and outdoor spaces. The lockdown and the quarantine periods experienced during the pandemic transformed the way we look at our dwellings, from the households we live in the evenings and non-working days to a multifunctional space. In this sense, residences need to be designed to flexibly match the needs of all the household members, with the purpose of maximising functionality, well-being, and comfort.

In this new framework, cities become an instrument of economic policy to achieve sustainable development goals, housing policies become crucial to address the new market needs and the growing housing deprivation, and social infrastructures become a key factor.

ANCE’s outlook for 2022 envisions a mild but still enduring positive trend (+0.5%) in construction investments, driven by a growth in all sub-sectors with the exception of housing redevelopment, which will be affected by the reduction of allocated resources envisioned in the last Budget Law.

However, uncertainty clouds the outlook for 2022 and the list of potential obstacles to full recovery is long and includes the exceptional surge in prices of the main construction materials, labour shortages, and the rise of inflation over the last months. All of which become even more severe and uncertain amid the conflict rapidly unfolding in Ukraine.


ANCE estimates that investment in housebuilding increased in 2021 by +21.8% YoY in real terms, due to a twofold effect: on the one hand, a notable increase of production activity (+12%) connected to the positive trend in construction permits started in 2016; on the other hand, the redevelopment of the existing housing stock, which now accounts for roughly 37.5% of total construction investment value, recorded an impressive +25%. Such an estimate, which largely exceeds the results from previous years, takes into account the positive impact on production levels derived from the demand recovery generated by the exceptional and unique measures deployed to incentivize the renovation and redevelopment of the existing housing stock. Above all the 90% Façade Bonus’ and the ‘110% Superbonus’ measures, as well as other ‘ordinary’ bonuses, introducing a generous system of tax rebates.

A fundamental role was played by the mechanisms of assignment of claim and invoice discounting, which allowed to limit the financial effort by citizens.

ANCE’s outlook for 2022 envisions a less resounding +4.5% increase in new housebuilding investment due to a -8.5% decrease in the investment for the redevelopment of the existing housing stock. The outlook takes into account the expected impact on production levels deriving from the reduction of allocated resources envisioned in the last Budget Law. For instance, the extension of the Superbonus for single-family dwellings is now conditioned upon the completion of minimum 30% of the work within June 30, with the resulting contraction, on yearly basis, of this market segment that in 2021 accounted for roughly 50% of realized investments.

GDP 2021




Total investment in construction in 2021


Non-residential construction

Private investments in non-residential building marked a real term increase of +9.5% YoY in 2021, confirming the positive trend started in 2016, just briefly interrupted by a negative result in the first year of the pandemic.

The estimate takes into consideration the robust positive trend in non-residential building permits started in 2015, as well as the favourable macroeconomic context affecting the production levels of non-residential building, traditionally more responsive to the trends in other sectors of economic activity. The second and third quarters of 2021 have been characterised by extremely encouraging GDP growth rates, +2.7% and +2.6% in real terms respectively. Moreover, Italian GDP grew more than the European average, reducing the gap of the pre-pandemic period with its main European competitors. 

The outlook for 2022 private non-residential building suggests a +5% increase in production levels. The growth forecast for non-residential building could have been much stronger (also in consideration of the positive trend in building permits registered over the period 2015-2019, and over the first three quarters of 2021) had the COVID-19 emergency been definitely resolved already. In fact, investments in non-residential building are among those that have been most severely affected by the current public health emergency situation that has radically changed social relations and people’s coexistence. For instance, in the tourism sector – one of the most important industries for the country's economy – the enduring restrictive measures adopted by many Countries to address the pandemic emergency are continuing to hinder the access to leisure and hospitality services, even if to a lesser extent than what happened in the most severe phases of the public health crisis.

Civil engineering

Civil engineering production levels also reported a substantial growth: +15% in 2021 YoY. The estimate takes into consideration the measures implemented by the Government over the last years in support of public investments in civil engineering works by local authorities, as well as the launch and strengthening of ongoing works for a number of important infrastructures.

These measures are finally producing a positive effect on investment levels, as reported by ISTAT data on the Public Administration gross fixed capital formation, which increased by +16.3% in the first three quarters of 2021 compared to the same period of 2020.

Similarly positive are the 2021 estimates from the General Government Transactions Information System (‘Sistema informativo delle operazioni degli enti pubblici’, SIOPE) released by the State Accounting Office that report a +16% increase YoY in the capital expenses of municipalities. The conspicuous recovery in local investment started in 2018, mainly driven by the many support measures introduced by governments over the last years. Those measures include the allocation for priority investments to secure territories and public building, and those for sustainable development (energy efficiency and mobility), as well as stronger incentives to public investments following the revision of fiscal rules to balance investment, and also the homogenisation of procedures in spending programmes that simplified their management by local authorities.

Moreover, the 2021 estimate for civil engineering also embodies the early acceleration effect determined by the launch of the NRRP on the ongoing spending programmes already included in the European Plan.

According to ANCE’s forecast, investment in civil engineering is projected to rise by +8.5% in 2022 (YoY), mainly due to the expectations on the use of resources made available by the NRRP that has reached the advanced phase of funds planning and allocation to local territories: 81% of the 108 billion Euro – amounting to 87.3 billion Euro - allocated for interventions in the construction sector have been ‘territorialised’ (i.e. allocated to regional administrations and local authorities, and/or to other subjects for interventions on specific territories).

In 2022 the NRRP is expected to fully enter its implementation phase – especially for the part concerning local authorities – and give rise, across the different territories, to the development of small and medium works that were already included in the existing spending programmes (securing territories and public buildings, school building, urban regeneration, etc.), and to the continuation of works on a number of railway sections under development. 

Nevertheless, the completion of these investments, as well as the NRRP general advancement, encounter some critical issues such as the high level of commodity prices and the shortages of materials and labour, which could have negative repercussions on the expected recovery of investments in public and private constructions.


Per cent variation of investment in real terms on previous year
investment Mln. € fixed prices
  Sectors 2021a 2018 2019 2020 2021a 2022b
1. Building 119,430 2.4 1.8 -7.5 16.6 -0.7
    1.1. Housebuilding 67,195 0.35 -0.87 -7.69 21.82 -5.58
       1.1.1. New 15,100 -0.1 -3.7 -9.7 12.0 4.5
       1.1.2. Renovation 52,095 0.5 0.1 -7.0 25.0 -8.5
    1.2. Non residential (c) 52,235 5.0 5.1 -7.2 10.5 5.7
       1.2.1. Private 42,429 6.7 4.3 -9.1 9.5 5.0
       1.2.2. Public 9,806 -3.2 9.5 2.6 15.0 8.5
2. Civil Engineering 18,020 -3.2 9.5 2.6 15.0 8.5
(1 + 2) Total Construction 137,450 1.7 2.7 -6.2 16.4 0.5
a: estimate - b: forecast - c: incl. R&M
Number of building permits in residential construction
  2018 2019 2020 2021a 2022b
single dwelling 10.983 10.721 9.058 N/A N/A
collective dwelling 6.991 7.257 6.353 N/A N/A
other types of dwelling N/A N/A N/A N/A N/A
Total 17.974 17.978 15.411 N/A N/A
(Collective dwellings and other types of buildings: in number of flats)