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THE CONSTRUCTION SECTOR CRISIS IN ITALY: ANY STRATEGY FOR SMALL AND MEDIUM-SIZED BUILDERS?
Abstract
The deep crisis that has hit Italy since 2008 is perhaps the worst since the second World War to date. According to the last studies by the Italian National Association of Building Contractors, the construction sector in Italy saw an unprecedented decline: between 2008 and 2015, investments in new residential buildings have collapsed more than 60%, those in non-residential 35% and public works about 50%, altogether 70 billion less. Even in terms of builders, between 2008 and 2014, more than 100,000 small and medium-sized buildings firms are forced out of the construction sector. Neglecting the public investment issue, often blocked by administrative constraints, bureaucratic criticism and lack of funds for the implementation of works, we focused on the private construction sector, investigating what can be done to reverse the negative trend, both in terms of numbers (lower commissions) and of amounts (lower cash availability), trying to reduce somehow the building firms mortality. Italy has always been one of the European countries with the highest number of homeowners. It probably shows the belief that it is the only investment that can maintain its value over time and, also, the only one that can achieve a zero market risk. Almost downstream of the economic crisis can be said that these are not entirely truthful statements. What measures can be implemented (or have been implemented) by the government to resume the construction sector? What are the strategies that small and medium-sized firms could target to continue their business in a context where demand for some types of dwelling (single-family and/or semi-detached houses) seems to remain, but the availability of money is lower? The paper presents the specific national setting and illustrates the effect of preferential policies on the construction market and also identifies some interesting aspects of prefabrication (even partial) to reduce production costs, selling prices, site construction times and investment costs in the whole life cycle.
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