The Italian manufacturing industry continues to demonstrate surprising resilience despite an international scenario marked by geopolitical tensions, rising energy prices, and renewed inflationary pressures. In the first four months of 2026, the sector's turnover grew by 2,3% compared to the same period of the previous year, while, adjusting for the effect of rising prices, real growth stood at 1,1%. This is what emerges from the Prometeia's July 2026 Industrial Sector Analysis Newsletter.
The photograph shows an industrial system that continues to grow, albeit at different speeds between sectors and within a framework of strong uncertainty linked to the conflicts in the Middle East and on the Russian-Ukrainian front.
Prices continue to support turnover
A significant portion of the growth in turnover comes fromproducer prices increased by 1,4% in the first five months of the year and 1,8% in the March-May quarter. The main factors contributing to the decline were the price increases for energy, oil, and derivatives, but also rising transportation costs and supply bottlenecks following the closure of the Strait of Hormuz.
Italy is no exceptionOver the same period, producer prices increased by 1,9% in Germany, 1,6% in Spain, and 1,1% in France, confirming widespread inflationary pressure across Europe.
Industrial production better than Germany
Production data confirm the resilience of Italian industry. In the first five months of 2026, manufacturing production grew by 0,8%, a figure that rises to 1,4% considering only the March-May quarter. In the European comparison, Italy's performance appears substantially in line with France (+1,6%) and lags only Spain (+2,9%), while Germany continues to experience significant difficulties with a contraction of 3,4%.
Particularly German automotive industry suffers sharp decline (-7,8%) and mechanics (-4,3%), two supply chains also closely linked to Italian manufacturing.
Electrical and mechanical engineering drive growth
The ranking of the sectors sees Electrical Engineering in first place, which recorded a 7,7% increase in real turnover in the first four months of the year. Mechanical engineering follows with a 5,1% increase, supported by the recovery in investment in capital goods and initiatives related to the National Recovery and Resilience Plan (NRRP) and the dual digital and energy transition. Electronics also climbed to the top three (+4,5%), driven by both semiconductors and demand for IT hardware.
Pharmaceuticals (+4,4%), Motor vehicles and motorcycles (+4,3%) and Metallurgy (+4,2%) also grew, while the intermediate goods sectors recorded more modest increases: Other intermediates (+1,4%), Construction products and materials (+1,2%) and Metal products (+1,1%). The sectors in greatest difficulty remain those linked to household consumptionThe Fashion system loses 0,4%, Food and beverages drops by 1,1%, Consumer Goods by 1,6%, Furniture by 3,2%, while Household Appliances closes the ranking with a 5% decline.
Investments restart
The manufacturing sector is supported above all by the return on investmentIn the first quarter of 2026, machinery investments increased by 5,5% year-on-year and by 2,4% compared to the last quarter of 2025, thanks to the renewal of tax incentives, the new hyper-depreciation with a deduction of up to 180%, the boost provided by the National Recovery and Resilience Plan (PNRR), and the growing demand for technologies for the digital transition.
Investments in software and digital technologies have also performed well, having grown for several years and further strengthened by the spread of artificial intelligence. Construction, on the other hand, shows an increase of 3,9%, supported by the public works of the PNRR, while the expansive effect of the Superbonus in the residential sector is gradually attenuating.
Exports beyond expectations
Despite the strengthening of the euro, Chinese competition, and US tariffs, foreign trade continues to be one of the main drivers of Italian manufacturing. In the first four months of 2026 exports of manufactured goods grew by 3,1% at current values and 2,2% at constant prices. Sales to European Union countries increased by 2,3%, while those to non-EU markets increased by 4,1%.
The United States confirms a notable capacity to absorb Made in Italy products, surpassing Germany as the main destination market for Italian manufacturing exports. The main drivers are pharmaceuticals, mechanical engineering, and the metals supply chain, also supported by trade in non-monetary gold.
On the opposite side Imports from China continue to grow (+3,7%), particularly focused on automotive, electronics and electrical engineering, sectors in which Beijing is consolidating its technological leadership.
Consumption still weak
The main element of fragility remains represented by domestic demand. Families continue to maintain a high savings rate, especially slowing purchases of discretionary and semi-durable goods. Consumption of durable goods, however, is holding up, supported by incentives for electric cars introduced in 2025, even though a growing share of demand is met through imports.
The perspectives
According to Prometheia, the scenario remains characterised by high uncertaintyGeopolitical tensions, energy price developments, and the normalization of trade flows through Hormuz will continue to impact the industry in the coming months.
The German infrastructure plan, the new European defence programmes and the technological sovereignty package could contribute to mitigating the risks, while a strong point of the Italian industry remains the financial solidity of the companiesAn analysis of the 2024 balance sheets of the four major European manufacturing companies highlights high capitalization, greater cash generation capacity, and higher liquidity than their competitors in Germany, France, and Spain, factors that could support new investments in digitalization and artificial intelligence even in the second half of 2026.
