ISTAT Sees Italy 2026-2027 Jobs Darken as Investment Contracts Sharply

1 articles · Updated · en.ilsole24ore.com · Jun 6

ISTAT’s updated 2026-2027 outlook turned more pessimistic on Italy’s labor market, warning that employment growth will slow while investment faces a sharp contraction in the second half of 2026.
The institute tied the downgrade to the prolonged Middle East war, higher energy and financing costs, fading building-bonus incentives and a slowdown in PNRR construction projects.
Construction looks most exposed: sector added value fell 0.3% quarter-on-quarter in the first quarter, and companies reported the steepest deterioration in hiring expectations and confidence.
Recent labor data had offered some relief—April employment rose 0.5% month-on-month by 123,000 and unemployment fell to 5.1%—but first-quarter inactivity still climbed to 33.7%, complicating the apparent improvement.
ISTAT said the withdrawal of fiscal support will hit construction hardest, with the negative carry-over from late 2026 likely to keep 2027 investment weak as well.