Italy Infrastructure Report Q2 2016
BMI View: Italy's construction sector is expected to see a marginal return to growth in 2016, although the overall market value will remain well below that of pre-2008 peak values. Limited public spending capacity will continue to hamper investment is social and utilities infrastructure, while a weak housing market means there is limited demand for residential construction. As such Italy relies largely on transport infrastructure to stimulate growth in the construction sector: several major rail projects are planned or under way, many of which are benefiting from regional financing. Limited labour market reforms and an uncertain regulatory environment, particularly concerning renewables subsidies, will continue to weigh on private investor interest and we expect minimal growth in Italy's construction sector over the ten-year forecast period to 2025.
Transport infrastructure remains the main focus of investment. State-owned railway company Ferrovie dello Stato Italiane recently announced plans to spend an additional EUR17bn (USD18.46bn) till 2020 on rail infrastructure upgrades which will primarily focus on safety, technology and capacity. Improvement work on routes to provide better connections between ports and rail freight terminals are also planned.
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