“From Superbonus Highs to Public Works Dominance: How the Italian Construction Market is Adapting to Unprecedented Growth and an Uncertain Future.”
The Italian construction market is currently undergoing a phase characterised by “out-of-scale leaps.” At present, public works are the driving force, following the shift from private renovation, which had been the main driver until last year.
A few figures highlight the current trends: from 2014 to 2020, the annual average of awarded public works contracts was €15 billion. In 2021, this surged to €50 billion in a single year, reaching €59 billion in 2022 and €95 billion in 2023. The public works market in 2023 was 6.3 times larger than the annual average for the nine years between 2012 and 2020. However, in the first half of 2024, awarded contracts dropped by 64%. We are now in the implementation phase of the projects, which extend beyond those financed by the NRRP.
A similar trend has unfolded in the renovation market with the conclusion of the Superbonus era and the sharp decline in other tax incentives. From 2013 to 2020, the old incentives – offering rates of 50%, 65%, and 75% to 85% – had stimulated a market worth €28 billion annually, nearly twice the size of public works contracts. In 2021, the total value of incentivised works rose to €67.1 billion, peaking at €94.6 billion in 2022. While the market decreased in 2023, it still amounted to €83.7 billion. In 2023 alone, the energy-saving Superbonus activated €46 billion in works, with an additional €14.5 billion in the first three months of 2024. However, over the next five months, this figure plummeted to just €728 million.
It is clear that the market will need to undergo a significant adjustment – if not today, then after 2027, when it is hoped that the NRRP’s implementation deadlines will have been met.
