WTC 2019 news release - The Italian construction system continues to grow in foreign markets despite global tensions and the hardships in the market of Italian public works. The 35 "top" companies working abroad have more than doubled their share of revenue from foreign contracts, which rose from 6.5 billion 10 years ago to the current 14.3 billion euro (+122.7% cumulative growth, +9.3% average yearly growth). The data is summarized in the 2018 Report illustrating the activity of Italian construction companies in the world, presented last October 1st at the Ministry for Foreign Affairs.

 The segments of reference – Complex infrastructural systems are the dominant category in the project portfolio of companies operating abroad. With 112 construction sites in the United States, Poland, Turkey, the Middle East and Sub-Saharan Africa, bridges and roads account for 22.9% of revenue, followed by subway systems (18.3%) and railways (14.1% for a total value of 11.6 billion euro).  

The 43 subways being built by Italian companies are concentrated primarily in Saudi  Arabia, Australia, Denmark, Qatar, Turkey, France, Romania. North and South America,  Africa and Asia are the locations for hydroelectric power plants, with 13 % of the project portfolio for a value of over 10 billion euro.

The figures provided by Ance describe the flight of Italian construction companies towards foreign markets, which, the report reads, "involves companies of all sizes". In 13 years, the share of revenue generated abroad has surpassed the national market share: from 31% in 2004 it now represents 74% of the total revenue, while on the domestic market, over the past ten years, revenue has shrunk by 3.3% per year. In 2017 alone, the national component decreased by 4.4% over the year 2016.

 “Internationalization – sustains Ance – is becoming an unavoidable choice for every class of company” even though the rate of growth depends on the category of revenue; as they grow the companies are becoming increasingly rooted in international markets: in 2017, the 46 companies in the sample operated in 92 countries, with over 270 companies regulated by foreign law.

 Though the 2017 results may be considered exceptional, with a +22% increase in  contracts over the year before, the joint appeal by the Italian Minister of Foreign Affairs,  Enzo Moavero Milanesi and the company workers, is to continue to develop relations, well aware that the increasingly stiff competition and market dynamics make it necessary to continuously raise the stakes.  

The markets – Of the new 2017 commissions for construction, for a value of 17.4 billion euros, 24% are concentrated in 19 countries of the European Union. The second area of expansion is North America (United States, Mexico and Canada), which has been one of the leading markets in recent years. The third region is the Middle East, which represents 16.7% of the total of new commissions, while the fourth is represented by the non-EU European countries, for a share of 12.1%. Oceania represents 10.7% of the 2017 acquisitions, a percentage never achieved before. The six Australian construction sites involve important infrastructural networks (subways, railways and roads) for a total of almost 3 billion euro. In sharp decline is South America, which only three years ago represented 25.1% of new commissions; in 2017 the market share languished at 4%.  

Non-EU Europe remains the main market for concessions. In particular, Turkey  represents the major market given its commitment to significant investments in  highways, bridges and hospitals. Next is Latin America, with a 26% share of concessions  while the Middle East joined the group in 2017, with one concession.  

An analysis – Following the presentation, the president of Ance Gabriele Buia, offered a "reverse" reading of the data, making a comparison with France where the national and foreign products show reverse proportions for the construction industry: “We have to reconstruct a balance between internationalisation and the domestic market. To go abroad means having to deal with the systems of other countries without being able to count on "returns": it's one thing to do this when you have a domestic market on which to base your internationalisation, but another to base all your revenue abroad. That makes the system more vulnerable”.  Visit http://wtc2019.lightdigital.cloud/attachments/construction-ita-eng_1544634045.pdf  to read the full press release from ITA -WTC 2019. 50/18.