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Construction in Italy returned growing
01 March, Corriere della Sera
The construction sector in Italy has finally registered a positive trend. According to Ance, 2017 has closed with a turnover only 0.1% lower than that of 2016. It differs only by a little from what was forecasted at the beginning of 2017, especially in a context where GDP has grown more than expected. In nominal terms, it’s a small growth (0.8%) and these are the best results of the last decade.
Interpreting the figures
In real terms, the residential sector is growing by 0.1%, thanks once again to the good results of renovation works, while new constructions have decreased by 0.7% (+0.2% in nominal terms). However, there are signs of a turnaround: since the second half of 2016, the construction permits (that generally require at least a couple of years to translate into built and sold properties) have been growing. The estimation regarding 2017 is for 55 thousand new permits, with an increase of about 15% compared to 2015, which registered the lowest values. However, we must take into account that, excluding the WWII years, these levels are the lowest in the last 80 years. There is less construction activity because there is less demand, but also because banks are reluctant to lend money to construction companies, despite the low interest rates. This is not an unreasonable cautious approach adopted by banks since 27% of bad loans are originated by construction companies (according to Pwc), with residential being the riskiest. In fact, operational buildings are generally built to order, hence there is already the certainty that the spaces will be occupied. As a result, investments for non-residential properties have increased by 1.5% in real terms in 2017, and they’re expected to grow by 3.7% for this year.
Returning to residential, the outlook for 2018 is for an increase in real terms of the turnover of 1.7% against the 2.8% estimated for the maintenance works. Developers are positive concerning the better conditions of the renovations business since the tax benefits have been confirmed also for 2018. The bonus to make properties anti-seismic has also been renewed and such types of works require complex interventions that will start in the next months.
Other options
Companies can also benefit from the possibility given to the property owner to transfer the tax credit to the company that carries out works concerning energetic and anti-seismic optimization works. Ance has implemented together with Deloitte an ad hoc platform. By transferring the tax bonus to the company, the client can obtain a discount between 15% and 25%, an interesting value for whom doesn’t have big budgets or doesn’t think to use the benefits within the next ten years.
Source: Corriere della Sera
Translator: Cristina Ambrosi