Italy - Country Commercial Guide
Design and Construction

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-10-29


Italy, which has the eleventh largest global construction market outside the United States, is of strong interest to U.S. exporters. U.S. building products enjoy a reputation for quality and reliability in Italy, although not always up to Italian standards for aesthetic design, which is considered important even for the materials and components that end-users do not usually see. The Italian design and construction industry considers itself to be a world leader, in the same league as the United States, and is therefore interested in looking at unique or cutting-edge products and solutions.  

According to estimates from the National Association of Building Contractors (ANCE), investments in construction fell by 10.1% in 2020 compared to the previous year, to around €125.5 billion ($153.3 billion). ANCE forecasts that the construction industry will grow by 8.6% in 2021, fueled by post-pandemic public works, public incentives to make buildings more sustainable and more digital, and an increase in demand for larger homes caused by the perception that teleworking and distance schooling – widely implemented during the pandemic – will become a fixture of life for the next few years.   

In 2020, investment in construction of new housing declined by 12.5% on 2019, nonresidential building dropped by 13.5%, public works and civil engineering fell by 2.5%. Even housing renovation projects, which was the only sub-sector to grow regularly throughout the post-2009 financial crisis period, declined by a sharp 9.8%. The COVID-19 pandemic caused the number of housing transactions to drop by 7.7% in 2020. A further decline of between -1.1% and -4.8% is expected in 2021.  

ANCE’s outlook for 2021 predicts a rebound of 8.6% in construction investment, mainly driven by the redevelopment of the existing stock for housing purposes (+14%), new housing construction (+3,5%) and by a gradual recovery in both private investments for non-residential building (+5%) and public works (+7.7%). ANCE expects most new housing and non-residential investments will be concentrated in a few cities in the north of Italy (Milan, Turin, Bologna). The largest area of uncertainty remains in tourism (hotels) and non-food retail, the sectors hit hardest by the pandemic.  

In 2020, public works fell by 2.5% due to a contraction of production levels and a fall in new construction project launches. The main causes were pandemic-related work and movement restrictions and the disruptions in functioning of public authorities as they transitioned to teleworking and shifted public resources to deal with the crisis. The number of calls for civil engineering tenders dropped by 11.1% in 2020, with particularly intense reductions in the second half of the year. Although the number of tenders fell, the average value of tenders registered an overall growth of 28.7% as public entities concentrated their energies on issuing tenders for larger projects. 

ANCE forecasts that investments in public works will rise by 7.7% in 2021. This is due to a combined result of several measures in support of civil engineering works included in recent years’ budget laws and the approaching 2023 deadline for the 2014-2020 European Structural and Investment Funds programming period.  The €209 billion  ($255 billion)  of EU funding that will be made available through Italy’s National Recovery and Resilience Plan, NRRP or “Piano Nazionale di Ripresa e Resilienza” over the period 2021-2026 is expected to produce only limited and uncertain results in 2021 as the allocation and planning processes will take up most of 2021.  

Italy counted 490,000 companies in construction and related industries in 2018, the last year for which data is available. Specialized construction services and products accounted for 75.9% of the total, followed building construction (22.8%), and civil engineering construction (1.3%). Construction and related industries accounted for 11.2% of GDP in 2018, employing 1.33 million people.  Italy also has one of the world’s highest home ownership rates as over 75% of families own their own homes, accounting for over 20 million units. 

Italy is home to manufacturers of high-quality products and has access to European and global suppliers of competitively priced building products.  To be competitive, U.S. suppliers must overcome shipping and regulatory costs and deliver on product performance and post-sales service requirements to compete on quality, reliability, innovation, or they must provide a unique selling proposition.  Regular direct engagement with distributors and buyers is often necessary to create and maintain sales and to distinguish specific product performance versus competitors.  

Leading Sub-Sectors


Italy is one of Europe’s three largest heating, ventilation, and air conditioning (HVAC) markets.  According to Assoclima, Italy’s HVCAC industry association, in 2020 the HVAC market fell by 7.7% on 2019 reaching a total value of €1.5 billion ($1.8 billion), about half of which represents imports. This is the first drop after five years of regular growth. National production in Italy fell from €762 million ($940 million) in 2019 to €712 million ($870 million) in 2020. Residential systems sold well, while systems for those industries hardest hit by the pandemic – hotels, retail stores, restaurants – fell drastically.  Increased interest in air quality during the pandemic stimulated a sturdy 20.6% increase in the number of air treatment systems sold in Italy in 2020.  

The pandemic accelerated already rising demand for residential HVAC systems, as more people began to work and study from home. This post pandemic situation may increase the demand for more energy efficient systems as well as IoT-enabled heating and cooling systems to offer real-time monitoring of system functionality and condition. As offices, retail outlets, hotels, restaurants, and other commercial spaces re-open, the increased attention to air circulation, hygiene, and quality is also expected to stimulate new demand. The pandemic therefore accelerated consumer demand for these products as awareness in Italy regarding the health hazards caused by poor air quality was already on the rise.  

Trade Shows  

MCE Expocomfort - Italy hosts one of the world’s leading exhibitions dedicated to residential and industrial HVAC&R solutions. The next edition will be held March 8- 11, 2022 at Fiera Milano.


Incentives for home improvements that improve energy efficiency  

U.S. suppliers of products, services, and technologies that improve the energy efficiency of buildings, including heating systems, air conditioning, insulation, solar panels, and charging stations for electric cars may benefit from Italy’s incentive program for homeowners. Known in Italy as the “110 Incentive,” the program reimburses homeowners for up to 110% of the cost of building improvements that increase energy efficiency. First enacted on July 17, 2020, Italy has extended the incentives up to December 2022 and is considering extending them beyond homeowners to include the owners of hotels and other corporate building owners. 

The program covers 110% the cost of purchase and installation of more energy-efficient heating and cooling systems and extends this subsidy to all related improvements that ensure or increase their efficiency – like doors, windows, roofs, insulation, and internet-of-things electronics.  

Opportunities may exist for U.S. companies with products or solutions in the following categories: 

  • Substitution of heating and air conditioning systems for single-family homes 
  • and some multi-family, residential buildings 
  • Home improvements for better insulation 
  • Improvements that increase a building’s ability to withstand earthquakes 
  • Improvements that increase the energy efficiency of new home heating and
  • cooling systems, including doors, windows, insulation, and roofing 
  • Solar panels 
  • Recharging equipment for electric vehicles 
  • Elevators and other improvements to improve access to people with disabilities. 

Intelligent and Sustainable Buildings  

Italian companies, the public sector, and end-users are increasingly interested in sustainability and opportunities exist for products with strong “green” performance attributes, in areas such as energy and water savings and indoor air quality improvement. The Green Building Council’s LEED protocols, which originated in the United States, are growing in acceptance in Italy and many building professionals take them into account for new energy efficient structures. 

In June 2021 the European Commission approved Italy’s National Recovery and Resilience Plan as part of Next Generation EU (NGEU), Europe’s €750 billion recover package. Italy will receive €68.9 billion ($84.2 billion) in grants and €122.6 billion ($149.8 billion) in loans from the EU to spend between 2021 and 2026. The plan sets aside €32.1 billion ($39.2 billion) for sustainable mobility, including investments to integrate more regions into the high-speed rail network and complete the rail freight corridors. The plan should boost sustainable local transport through the extension of cycle lanes, metros, tramways and zero emission buses. This includes the construction of electric charging stations across the country and hydrogen refueling points for road and rail transport. It also sets aside money to “green” Italy’s ports. 

Port Infrastructure Modernization and Expansions:  

Italy will invest €7.4 billion ($8.9 billion) to modernize and increase capacity at its ports between now and 2026. Much of this spending is earmarked to increase the size of the ships that Italy’s main container ports can handle through dredging, new breakwaters, and improved connections to road and rail links. Other funds will be spent on measures to make ports more ecologically sustainable or more efficient and secure through digitalization. U.S. companies with innovative solutions in these sectors may benefit from increased public spending. 

These funds come on top of the projects already planned by the Ports of Genoa, Italy’s busiest container ports, which in 2021 plans to award €2.6 billion ($3.1 billion) in tenders for a new breakwater, dredging, and an expansion of its shipyards. 

U.S. Commercial Service Contact: 

Joshua Lawrence, Commercial Specialist 

U.S. Commercial Service, U.S. Consulate Milan 

Tel: +39 026268 8539