The S&P Global Italy Construction PMI rose to 49.4 in May 2026, up from 44.8 in April, which was the lowest in over three and a half years. The latest reading points to the mildest decline in activity in three months and suggests conditions are nearing stabilization. Activity and new orders continued to fall but at the slowest pace since February. Weakness remained centered on housing and commercial construction, while civil engineering returned to growth. Firms cited subdued demand, uncertainty, and difficulty securing tenders as key drags on activity. Meanwhile, business confidence improved, with firms turning optimistic on the 12-month outlook amid expectations of new contracts. On the labor front, employment growth accelerated to its strongest since January despite lower subcontractor usage. Still, supply-chain delays and cost pressures linked to the Middle East conflict persisted, and input costs rose at the second-fastest rate since September 2022 despite easing from April.