Investments in the construction sector will fall 4.4% this year, 5.7% next year, and a further 2.5% in 2010, the report by Cresme, a leading research institute covering real-estate trends. The figures reflect real or inflation-adjusted declines.
This year's contraction is the first in Italy for 13 years.
Cyclical forces were already leading to weaker demand, but the global credit squeeze has aggravated the trend, said Lorenzo Bellicini, director of Cresme.
New residential construction will drop by 30% in the next three years, according to the 600-page Cresme report presented Wednesday at an industry trade fair in Verona.
Barring public-policy decisions aimed at propping up the sector, both commercial and civil-engineering projects will also see sharp declines.
